From: Barretta Todd C.(CEDpTCBI To: Santoro, Steve H.(~NLRSHSI Subject: NTD Reportable Events Date: Thursday, June 1, 2017 2:12:47 PM Attachments: imagel.PNG ATTOOOO1.bcY
Hi Boss,
The attached, as I privately shared with Penny during the safety meeting this morning, indicates the criterion the FTA uses to define an event that it deems reportable. Please note, as I had suspected, this detinition somewhat differs from what had been presented and leads me to believe, with a fair• degree of certainty, that we overreport certain incidents and occurrences which do not meet the criteria for• N7'D submission.
Todd Todd Barretta
~rome Barretta, Todd C. (CEDOTCB) Sent: Thursday, June 1, 2017 326 PM To: Warren Hersh ([email protected]) Subject: System Safety Data
H i Warren,
hope all is well. I received the confidential materials for the audit committee meeting —thank you.
Today I was told to take a look at our safety data, how it is collected and reported —what is is —metrics &the veracity and validity thereof, etc. Gardner mentioned that you had started the process or at least had some involvement with reviewing it. Steve asked me to touch base with you on it. I do respectfully note audit project no. 17-050 and 17-051 and also see that you also have afollow-up scheduled as part of the FY18 IAP.
Was there an IA report issued for 050 and 051 and/or do you have any information and advice you can share with me about the system safety metrics and reporting management process at some time of your choosing?
Thanks
Todd
Todd C. Barretta, J.D., M.B.A. (.'hiaf....,.. ('mm~lian~a ...... r...... ,...... ,... (lffi~ar NJ Transit Headquarters One Penn Plaza East, 9th FI. Newark, NY 07105 (973)491-7821 (o) (201) 988-3358 (c) TBa rretta t~ n itra ns it.co m T~r~~~-~ ~n~ a~ra° ;,~ rn c, ~. # ~ ~ - 't `iq-:~D~\ ~~ .:
NJ Transit Rail Operations Control Center: Planning for the Future
Activu contacts:
Paui Johrden John Desmond y
[email protected]. [email protected]
973;332.8386 973.343.4904
Vertical Market Manager VP ofSales
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Page 1 of 5 Table of Contents
Why Overhead Video Displays were placed into the ROC:...... 2
Activu Corporation's Role in the ROC and 14+ Year Support: ...... 2
Beyond End of Life of the OVDs and support equipment:...... 2
Mitsubishi/Activu Solution :...... :...... 3
The OVDs will Continue to Fail:...... 3
_. The OVDs are Not Just "Eye Candy': ...... 3
NJ Transit's Customized Training: ...... 4
N1 Transit's Reputation as a leader in the Rail Control Room Venue:...... 4
Activu Corporations' Recommendation :...... 4
Conclusion:...... 5
aCtIVU.COfTI ~'~l~ld~'tp~ ~ d:~a€'~~~[a~s~~Py~~~. Page 1 of 5 ~for the Future Center: Plannin Operations Contra) NJ Transit Rail to to how that led came from and where you history, plus to understand a summary it's helpful has provided for the future, Carporation at the New hen planning in mind, Activu Video Displays W that the Overhead 34 situation. Keeping and need for based on your current on their use for the future Personnel recamrnendation from NJ Transit our expert feedback Center and lastly, Operations Transit Rail Jersey Industry. Display Wali years in the in~~ the RC~C. r~r~re placed that New Jersey Video misplays we understood be tfUhy Overhead in early 2002, required to partner Arinc, and it was with our Center (ROC) for began working Control in their quest When Activu Transit Rai(Operations all employees their new NJ center to aid was planning communication Transit control and art" command a "state of the satisfaction. at a safety and customer awareness performance, situational superior that would increase actions environment to fast, accurate create a working and lead this goal was to current situation constructing NJ Transit's of the dedicated to to gain knowledge of dollars were enabling viewers Millions that glance, and dispatchees. create an environment the operators in order to responses by to every detail their duties. and great attention could focus on building, paying operators m ultilevel so that multitasking distractions, minimized possible 14+Year Support: in 2003, in the RC~C end Mitsubishi Cubes dole lamp based ~ctivu Corpora~ior~'s DLP "End of Life" ~;E~~rut~~n Mitsubishi their 189 iirsY these cuues r~a4"e~ left and installed On schedule, parts Activu provided 5-7 years. were no replacement approximately depleted, there ARINC rated to last 2012. Once display the *hat were until t"~t ac~?ss and parts were available equipmer~~ and replacement and support The Activu Servers, these cubes. to service of Life" in 2007. expected (ife- its "End nearly twice the SCADA also reached until 2015, support contract or the Active NJT with a these OVDs teas supported to servi~;e Corporation currently in place Activu Support Plan is no Active span; but, there processing. equipment: OVDs end suppart the existing of the OVDs to replace End of Life discussing options Active Beyond Personnel began (not including Transit ROC 5 million dollars Active and NJ to cost would new I n early 2011, was estimated and providing a project that all existing equipment were equipment; removing replacement with new have required a ful! system and would disruptions of that time. equipment) operational equipment at processing costs and the processing and bases. The and the Active isplay cubes the OVps d not to replace these were not in NJT deciding in 2013, but major factors -model cubes certain late upgrading many Upgrade kit for then began LED Engine at the ROC. Active cube introduced cubes installed their existing Mitsubishi generation LED Engines into the older, first resolution minimal a pplicable to installing higher with customers, could be irnplemen#Pd control room that of its other economical upgrade to be a very 5 This proved Page 2 of structures. L ta.( ;F~~ #~~'t 9~4 i~' ~' ~e aCtIVU.COt't'1 The OVDs allow operators to continue to monitor critical information when they must leave their desk, such as to walk to a printer, return from a restroom visit or confer with a colleague.
When an incident occurs that requires action, the OVDs also enable the Supervisor to look up at the Full Track and Power Displays to fully understand the current situation without having to walk over to the operator's desk and hover. We understand that hovering produces additional anxiety and stress for the operator who is trying to perform and complete their assigned tasks.
We also understand that certain OVDs are dark now (cube failure) and prohibit display of certain portions of the NJ Transit Track such as in the case of the Atlantic City Line.
Power Side has expressed an immediate and future need to display HD or 4K security camera outputs, thermographic display, infra-red video output, real-time information, and analog/digital data output from remote field locations. The higher resolution SXGA+ DLP LED engines proposed will provide support for these sources, that cannot be effectively displayed with the current setup. f~J Transit's ~us~omized Training:
Activu Corporation appreciates the specialized training required to perform as a dispatcher for NJ Transit. We understand that this training was developed in house by N1 Transit, to meet the critical m ultitasking operation expected by the dispatchers; and, that training on selected OVDs in the Track Control Room were dedicated to providing important "real life display situations" that could be monitored and used as a teaching tool. Today those dedicated OVDs are in short supply, as some are used for spare parts which to support operation of the live track and power displays.
IV1 Transit's Reputation as a leader in the Rail ~~ntra[ Room Venue:
Finally, the NJ Transit ROC was considered the gold standard for all Rail Control Rooms being developed i n the United States. The NJ Transit EOC and the NJ Transit Bus for example, have taken the lessons l earned from this site and have and will have installed Activu display walls. The N1 Traffic and Technology Center in Woodbridge, NJ, initially installed in 2007 with Mitsubishi Lamp Based Cubes was upgraded in 2016 with new Mitsubishi LED Engines. Touring of the NJ Transit ROC was very good for public relations, which promoted NJ Transit's safety operation and expertise in Rail and Power control monitoring.
Activu systems have been installed in dozens of transit and transportation control rooms throughout the US and elsewhere globally. The operational model employed in the original 2002 NJ Transit ROC project, where local operators and managers rely on Activu enabled OVbs to increase situational awareness and i mprove their effectiveness, has becor7~e a standard "best praclii:e" for organizations with similar responsibilities, even those who only support a fraction NJ Transit's ridership.
Finally, Mitsubishi Corporation would also like to publish a case study promoting the long-term relationship with NJ Transit and the latest installation of the Mitsubishi LED Technology in Upgrading the NJ Transit ROC and future proofing their OVDs in a National Rail Publication.
aCtIVU.00111 F' ~~f~~~` ~e ~. ~~F 9~`~lf~~. Page 4 of 5 ,4c~ivu Csrparations' Recornmenda~ion:
Activu's recommendation for the New Jersey Transit, is that the SXGA+(1400 pixels x 1050 pixels) LED Engine Upgrade be installed. We were informed that Arinc is currently developing updated SCADA Software that will include more detail, which requires more pixel space. An upgrade to a higher resolution LED Display will enable display of that information in the same physical space. This, along with upgrading the Activu Servers, will help prepare NJ Transit for this pending technology when it is available.
I nstalling the LED based engines will also reduce the overall operating costs that NJ Transit by eliminating the cost of replacement lamps and other replacement parts such as a color wheel, which are no longer required. Reduced power consumption and BTUs, and the lower cost of the Activu Support renewal will help offset the investment cost of this upgrade over the expected 11 to 12 years life span of this LED Technology. This is all detailed in our Activu proposal.
Activu anticipates a 6 to 7 month timeframe to complete this project, which takes into account 3 months for of Mitsubishi to design, retool the factory and manufacture these custom N1 Transit LED engines and 4 months for installation and integration by Activu on-site. Time is of the essence as the existing cubes in NJ Transit ROC continue to fail creating potential safety issues to the NJ riders, NJ Transit crews and NJ Transit staff.
Canclusion:
Safety and Quality Performance are the hallmarks of NJ Transit. These have has been achieved by the OVDs, which are necessary tools being used by the ROC Operators these last 14 years. These recommend OVD changes will keep the NJ ROC running efficiently and effectively for the next 12-14 years. Activu and Mitsubishi believe that this OVD Upgrade will restore the NJ Transit ROC back to a world class operation with even better capabilities than the original installation.
aCtIVU.COfTI C~~° T` , ~7 ~~~i ~~'3~L Page 5 of 5 Fromc Barretta, Todd C.(CEDOTCBI To: Fitzsimmons. Neal A.(CLRONAF) Subject: RE: HBLR Date: Monday, May 8, 2017 1:26:00 PM
H i Neal,
OK, noting that there is an active police investigation, can we chat about it, in tree general sense, for just a few minutes sometime today?
'mI hippy to come down to you if you have any time today —else it and I can wait no problem.
Thx
Tadd
From: Fitzsimmons, Neal A.(CLRONAF) Sent: Monday, May 8, 2017 1:13 PM To: Barretta, Todd C.(CEDOTCB)
a m available if you need to discuss - as Chief Trucillo notes, there is an active police investigation.
Neal Fitzsimmons
Sent firom my mobile phone
On May 8, 2017, at 1:09 PM, Trucillo, Christopher (CPOLCXT)
Todd,
am not sure what you mean by a "formal briefing". There is a police investigation being conducted now on this incident. I am in Trenton today, but I would be happy to answer any questions you may have on my end tomorrow when I am back in the office.
Cl
Sent from my iPad
On May 8, 2017, at 1:05 PM, Barretta, Todd C.(CEDOTCB)
Good Afternoon Gentlemen, Will there be a formal briefing in re: the incident this past Friday in Jersey City? I had a few questions and comments and wanted to know if should hold them for a more appropriate time/place.
Thanks
Todd
Todd C. Barretta, J.D., M.B.A. Chief Compliance Officer NJ Transit Headquarters One Penn Plaza East, 9th FI. Newark, NY 07105 (973) 491-7821 (o) (201) 988-3358 (c) C E~arrQtta l~ n jtransit.com
Greetings Mr. Santoro,
To give you a brief update on my work, schedule, and plan:
This week I met further with Gardner and his deputy and we will continue to discuss delineation of d uties and responsibilities. Although there is definitely some overlap, I expect that Gardner and will work closely and very well together. I hosted Navex Global here on Wednesday and Mike Slack joined the first part of our meeting. We discussed several of their products as a good fit for our enterprise wide compliance management software system. I also spoke for a second time with a representative from CEB (now Gartner) who I have dealt with in the past, and may ask you to fund some compliance resource services that they can provide. The membership is on an annual basis but in the conversation, I learned that our HR dept. already does business with Gartner so I will get together with Deb at some point in the future to understand what she gets from them and how m uch we currently pay to understand if we can bundle some services for savings.
Yesterday, I went to MTA HQ and spent a while with Lamar Kearse, their CCO who provided me with some valuable information on their program. Although my focus and areas of responsibility will differ somewhat from his, there are a remarkable number ofsimilarities — in fact their latest risk assessment is practically a mirror copy of ours. My take away from that was a boost of confidence as it became clear that our discussions and vision for the myself and the role of compliance at NJT is on track and in many ways parallels what has been done at MTA over the past 15 years. In fact, SOil'lE Gf li~ie Iieai'tei'iii gOdiS ti'ldi.'y'GU di'~u i ri2V~ ~dii:Eu c~u0ui arm Siiii strong areas of interest iGi' MTA compliance and their program is a decade and a half more mature than ours — We agreed to continue to stay in close touch and i believe that will be a supportive good resource if for nothing else than a healthy exchange of ideas.
have been in communication with Gardner, Eric, and Emery regarding our risk as it relates to NJDOT's compliance with a April 15, 2019 FTA deadline to establish a state safety oversight program. I will provide you more information as it develops but I think this is something that we need to really monitor. On the subject of deadlines, I did see your email forward of the FRA i nspection report recommending a violation for the status of our PTC implementation. I imagine this result ties well to the Q1 status report submitted to the FRA and publicly available on their website since May 25. I do respectfully note that in more than one candid and informal conversation, I have been told that we are very far behind and that it is unlikely that we will meet the final end of 2018 deadline —this is brought to light fairly well by the Q1 status report and the violation for not meeting the milestones identified in the implementation plan. Please advise on any role other than informal monitoring and cataloging any related inspection reports that you would like me to play in helping to ensure that we are compliant with the ultimate deadline and on schedule according to the implementation plan or otherwise. So as to not step on toes, as u nderstand that there are many people working on this large project, I am happy to serve any role you see fit, but will not proactively act on any PTC related issue or concern unless you tell me specifically to do so otherwise.
met with Jackie Halldow at the beginning of the week and shared my in progress strategic plan for compliance. Her feedback was mostly positive and I will incorporate her thought and comments, all of which I value, into the working draft. She also shared with me some information on compliance funding and budget and as I understand from her (and subsequently in an email from jay Patel) there is now in place a compliance management center number and Jay has or will make some provisions to set aside some funds — so I am encouraged, and very much look forward to an ability to actually materialize the plan. I suppose it is on this point, that we need to have some additional conversations to further document the roles and functions.
received an email from Terri Silverman setting the grade and description for a secretary but u nfortunately, I think their analysis falls a bit short of the role I had expected my administrative support to be capable of serving. Under their analysis, I would not be able to recruit a competent, capable, and experienced person to perform the tasks I laid out in the job description. date yesterday, i did reach out to Doug Clark (as Terri Silverman was unavailable) to discuss my issues and concerns. I explained how it would be close to impossible to find someone that can perform the 6 out of 18 tasks in the job description that are relatively higher functioning, greatly exceeding basic secretarial/reception duties while expecting to pay that person at a grade lower than every other executive assistant/special assistant/executive secretary here except one whose current d uties do not at all favorably compare with the job description that has been agreed for this role. In response, he agreed to take another look at it and see if they could revise. /"
(J18f1 LO UIIIIZe Ltle TIfSI iUll IC1S'ldiifll~f1i Gi my ~aiu iiiiie oil I ICXL WCEIC iG iakE a uiiE~ i~iSiley ufEaii with my son. It had been on my calendar and although Jackie told me that you do not require a forma! approval for varatf~n time, I nonetheless asked her to please make sure that you knew and ,~~/ that there was no issue with upcoming time off. Having heard none, i trust you do not have any ~C' objection or issue. Since I do not yet have a delegate, I of course will forgo sending out a traditional delEgation of authority; however, i will keep my NJT phone with me at all times end will also continue to check and respond to emails while away. in addition to a little break, I also plan to utilize some of the downtime to continue to develop and finalize my department plan and the compliance charter and I am eager to share that with you upon your first availability following my return. Please enjoy the weekend and thank you again for this opportunity.
Best Reagrds,
Todd
Todd C. Barretta, J.D., M.B.A. Chief Compliance Officer N J Transit Headquarters One Penn Plaza East, 9th FI. Newark, NY 07105 (973)491-7821 (v) (201) 988-3358 (c) T~arrettaC~nitrs~n5it.cc:~~Y~ ~~,,t r~~~stT ~ _~ T'1-i~ 4+t'€iy '~e~ ~ry~ (~TRA~ISIT
l'O: Ms. Amy Herbold, Deputy Executive Director
FROM: Todd Barretta, Chief Compliance Officer
DATE: May 12, 2017
SUBJECT: FTA Drug &Alcohol Program Audit
VIa4 EMAIL AND lNTEf20FFICE MAIL
On or about March 20, 2017, NJT was notified of FTA's intent to audit our mandated drug and alcohol program. The FTA routinely assesses compliance with their drug and alcohol testing regulations through on-site visits to transit grantees, state DOTs and 49 U.S.C. section 5311 sub-recipients. The on-site visits include two components:(1) an i n-depth review of the policies, procedures, and records related to drug and alcohol testing and (2) interviews with drug and alcohol program employees including the drug and alcohol program manager(s), the medical review officer(s), and the specimen rn~~Pr~~r~. ThP cnllPct~rs are also required to perform mock breath and urine collections for the audit team to observe.
Lash month, in response to the FTA's r~ques~, ~iJr ~e~rr~pii~d c~~iaiie~i i~~`c~rm~~ti~r~ an~i records related to our program and the programs of our contract carriers)/sub recipients and transmitted this information in advance to the FTA's Office of Transit Safety and Oversight. Under applicable federal regulations, NJT is ultimately responsible for not only our own regulatory compliance; but the full compliance of each of our sub-recipienfi contractors.
The FTA assembled an audit team which consisted of DOT Transportation Industry Analyst, Mr. Michael Redington from Volpe Center and five individuals employed by FTA's contract auditing firm, Cahil Swift, located in Cambridge, MA. Following their i nitial review of the pre-audit materials, the six-member team was on-site this week at New Jersey Transit and at the field locations for four of our sub-recipients: Academy Express, 21St Century Rail Corporation, Bergen County Community Transportation, and Middlesex Community Department of Transportation.
The audit team subsequently prepared a Final Audit Report which was shared with NJT this morning during an exit interview. fVJT was not given an opportunity to discuss any potential findings with the audit team prior to preparation of their final report. Thus, it remains significant to note the lik~lihaod thai one or more findings may very well gave been made in error. For example, under pressure of the interview, it is possible that a drug and alcohol program employee incorrectly answered an interview question which resulted in a finding that an area of our program was deficient when in fact, the person i nterviewed simply misstated a detail of our official policy or procedure. Erroneous findings will be addressed by NJT when we submit the details of our corrective actions to the FTA in August 2017. . _.__-- am pleased to report that the Audit team did not identify any major deficiencies or areas of concern with respect to NJT's drug and alcohol program or that of any of the four selected sub/recipients/contractors. In fact, although the FTA does not provide any grade or overall score, it remains significant to note that we were informed that this --- ouerall was a successful audit and that we are performing reasonably well and above what the audit team had expected prior to the commencement of the on-site visits. With that, had the FTA, by and through the audit team discovered any serious defects, we would have been required to perform immediate corrective action and would be re- visited one or more times again this year. Instead, we were informally told that there are no such concerns and that we should not anticipate any further audits or action with respect to our drug and alcohol program anytime in the near future.
f~otwithstanding the foregoing, and as is typical in these types of reviews, some minor defects and findings were respectfully noted and NJT has been given ninety (90) days to take corrective action. For NJT and each of the four contract carriers, findings of deficiency are categorized and classified by one of seven functional areas of review: policy manual, program manager interview, records management interview, breath alcohol technician interview, urine collections interview, medical review officer interview, and substance abuse professional interview. With respect to NJT, it remains most significant to note that in practice, NJT is in full compliance with the scope and spirit of the dr~~a end ~I~~h41 t~stina regulations.
As such, the noted minor findings are more representative of a defect in documentation rather khan an ac~uai error, omission, ~r~ c~versigh~ in ~~7e c~~~r~~ic,i~y ~~f c~ur~ p~~r~gr~rn. ~=~r example, the audit team found that NJT does not properly document the decision making process used to reach a decision not to administer post-accidenfi (PA) drug and/or alcohol testing when an employee is discounted as ~ contributing factor to an accident. NJT does in fact utilize the industry accepted flow chart to reach said decisions) and a report is issued with each incident. Contained within each report is the factual background surrounding the incident; however, the reports lack a conclusory statement summarizing why the employee was not PA tested and how his or her actions are discounted as a contributing factor. Consequently, although the FTA properly notes that in each PA incident reviewed during this audit, NJT, in their opinion reached the correct decision with respect to PA testing, that decision is not supported in our documentation without requiring the reader of the documentation to draw reasonable deductions and inferences. Thus, we are properly making decisions according to what is required in the regulations) and pursuit to the process recommended in the circulars but we need to more definitively document our decision. A summary of the findings is as follows:
Although still considered a minor finding, the internal clock on the EBT machine located at Holy Name Hospital, which serves as the test collection site for NJT's sub-recipient, Bergen County Community Trans~ortatior7 was found #o be off by one hour and this must be adjusted within thirty (30) days. This is the only finding which requires corrective action in less than ninety (90) days.
2 NJ Transit
The review of NJT's policy manual reveals ten (10) minor deficiencies in corporate policy. All will be addressed and corrected and a revision to our existing policy, 3.25A governing drug and alcohol testing for FTA covered employees performing safety sensitive positions wil! be made. Although none of the policy review findings are major, it is important to note that the undersigned believes that some of these findings are clearly erroneous. For example, item 1 found that our policy does not indicate that employees are prohibited from using the five listed drugs at all times and asks that we submit to the FTA a revised policy that "includes the requirements of section 655.21(c). I n actuality, our policy clearly defines prohibited drug as "marijuana, cocaine, opiates, PCP, amphetamines, ecstasy and/or any other drug for which an employer must test under 49 C.F.R. 655.21." Other policy findings fail to note that the deficiency is a result of NJT's policy actually being more stringent (as is allowed) than what is required by the regulations. For example, item two does note that our policy does not require furnishing proof of having completed a referral, evaluation, and treatment plan for an employee that has failed a DOT pre-employment drug test. In actuality, this provision is not applicable to NJT because our policy is simply to not hire someone who has failed a pre-employment drug test.
There were four findings with respect to the interview with NJT's DAPM. Most of those were related to the DAPM simply not having first-hand knowledge of our actual employment policies.
There were five findings related to the interview with NJT's record manager. All were ralatarl to minor r1n~~mPnt~tic~n c1PfP~t~. In nrac~ICe; our procedures are in comgliance with the regulations.
there were three finings with respecf to fhe interview witih i~i,~T's ~rearh a~cohoi technician. Again, all were minor, for example, the collector was not aware that a test must be canceled in the event that the printer failed to print a confirmation test result. Also, at least one time, the documentation revealed an impermissible delay of alcohol testing (such as drug test being performed before alcohol test). NJT will ensure that the technicians are fully trained and that all of our procedures are performed according to regulation.
There were two findings with respect to the interview with NJT's urine collections technicians. Again, both deficiencies result from the technician incorrectly responding to the interview questions. In practice, our official procedures are in compliance.
There was one finding with respect to the interview with NJT's Medical Review Officer. The interviewer discovered one instance where a return to duty test and one instance where a follow up test were not marked as having been observed. The MRO did not notify NJT. In actuality, the MRO is supposed to notify the employer if a test requiring direct observation was performed without observation. In practice, clearly we properly perform tests which require direct observation as only two defects were discovered following review of many tests.
3 There were no deficiencies found with respect to the interview with NJT's substance abuse professional.
Contract Carriers
NJT, although responsible for the regulatory compliance of our sub-recipients, does not itself manage their programs. Instead, their compliance is managed by NJT's contractor, COSI. Again, findings related to the review of records and policies of and i nterviews with the personnel from our contract carriers were minor in nature. NJT will work with our contractor and directly with the sub-recipients to ensure that any required corrective action measures are timely implemented and reported to the FTA. With respect to each of the contracted carriers, the bulk of the findings relate to the timing of testing such that it was not impossible for an employee to ascertain whether or not an employee would be tested at a given time or date. It was noted that tests are not typically performed on the first day of the month nor our tests typically performed outside of the administrative office hours. In one instance, an employee of our contractor carrier was given 24 hours' notice before a test. Employees should not be given advance notice. NJT will ensure that contract carriers are performing all required testing without advance notice and in a truly randomized fashion at all times of the day.
Of the four NJTsub-recipient's, 21St Century Rail had the most defects. COST explained to us that this issue was known as the person responsible for coordinating their program had abruptly left and never returned to work at 21St Century following an illness. There was no back-up person properly trained. Unfortunately, that person had left, without backup, at precisely the same time period covered by this audit. Since that time, there is a new person serving as their program manager and our contractor, COST, has been working extensively with that person. The undersigned was informed that an internal review of their most recent records indicates that most problems have been resolved.
Very truly yours,
Todd C. Barretta From: Barretta, Todd C.(CEDOTCB) To: Tabon. Gardner C. jCOSSGCT); Daleo. Eric R.(~CAPERD) Cc: Ll narady. Emery].(CROPEJU,~; Kilcoyne, Michael P.(BSPVMPK~; Fitzsimmons, Neal A. (CLRONAF~; Lavell, Robert M. (c.ROPRML); Schworn, James (CPRCJXSa; Wyckoff. Paul L (CCAPPLWI; Thomason. Lori M.(CCAPLMT); Merritts James C.(COSSJCMI Subject: RE: F("A Posts Status of State Progress to Meet Rail Transit Safety Certification Deadline, Avoid Funding Impact if Deadline is Missed Date: Friday, June 23, 2017 3:48:00 PM
N ello Colleagues,
Please clarify, is there or is there not ~ risk (financial funding or otherwise) to NJT in the event that the state DOT fails to meet the deadline? And if so, can we quantify the potential impact?
Thanks
..•
Todd C. Barretta, J.D., M.B.A. Chief Compliance Officer NJ Transit Headq~a~rters One Penn Plaza East, 9th FI. Newark, NY 07105 (973) 491-78?_1 (o} ;201; 9~8-3358 ,c; T Barretta(~njtransit.cam T~A~l~SIT ~~'r~~ ~v,,, rr, ~~~:,.. `~ ... :.~
From: Tabon, Gardner C.(COSSGCT) Sent: Friday, Junc 23, 2017 3:33 PM To: Daleo, Eric R.(CCAPERD)
Eric,
I met with the program's manager, Kevin Conover, yesterday. He is relatively confident they will; nevertheless, I will request a written summary from them.
Gardner On Jun 23, 2017, at 3:25 PM, Daleo, Eric R.(CCAPERD)
Gardner:
Thanks —obviously our funding is patentialiy impacted by NJDOT's compliance. Da we know the status of haw far along NJDQT is to meeting the deadline, and have they given you written assurances or a schedule that demvr~strates (if they have not already) that they will rt~eet T,he deadline?
Eric
From: Tabon, Gardner C.(COSSGCT) Sent: Monday, June 19, 2017 7:41 PM T'o: Daleo, Eric R.(CCAPERD) Cc: Ungrady, Emery J. (CROPEJU); Kilcoyne, Michael P. (BSPVMPK); Fitzsimmons, Neal A.(CLRONAF); Barretta, Todd C. (CEDOTCB); Lavell, Robert M.(CROPRML); Schworn, James (CPRCJXS); Wyckoff, Paul L. (CCAPPLW); Thompson, Lori M.(CCAPLMT) Subject: Re: FTA Posts Status of State Progress to Meet Rail Transit Safety Certification Deadline, Avoid Funding Impact if Deadline is Missed
Eric,
No, NJT is not at risk. NJDOT, our SSOA, is responsible for meeting the mandate.
Gardner
On :Tun 19, ?01.7, at 4'47 PM; 1~a1~~, F;r~ R,(~(~;A.PF,R~I
Gardner,
Is NJ's prograrri FTA certified? Any risk to us here?
Eric
Sent from my iPad
On Jun 19, 2017, at 1:37 PM, Ungrady, Emery J.(CROPEJU)
I~'/~
From: Federal Transit Administration [mailta:usciotftaCa~ blic,govdelivery.com] Sent: Monday, June 19, 2017 12:24 PM To: Ungrady, Emery J. (CROPEJU) Subject: FTA Posts Status of State Progress to Meet Rail Transit Safety Certification Deadline, Avoid funding Impact if Deadline is Missed
FTA has notified the 30 states where rail transit systems operate that federal law requires they establish an FTA-certified Mate Safety Oversight(SSO) Pro~ra~n by April 15, 2019. If a state fails to obtain certification for its SSO Program by the deadline, FTA is prohibited by federal transportation law from obligating any funds to public transportation agencies throughout that state until certification is achieved.
When FTA's SSO Program final rule took effect in April 2016, it established a three-year timeframe for states to obtain certification for their SSO Programs. With the certification deadline less than two years away, FTA is encouraging states to act quickly to enact any necessary legislation, statutes and regulations, particularly those states whose legislatures meet only part-time or biennially. Currently, there are nine states remaining that still require legislative action at the state level prior to FTA certification.
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,..._, T'h+s m~ssa~e has be. ;n se,~t by i~eder~l . r<;ns~t 11ci~7iisiistraion 120L) Ne=r,~ JE : s<:y liv~:nuc, s~ , v~J~:;r,n,~to~,, roc; zo:>~a I_g.::... PRELIMINARY DISCUSSION D R A F T —NOT FOR DISTRIBUTION
AUC~IT RE'-.PORT NO. 17-OOfi
NEW JERSEY TRANSIT C4RPORATIQN ti~~-~~ts~►ti ;a~titi~ ~~~a~3~~~3
FAMILY MEDIAL LEAVE -ACT (FMLA) COMPLIANCE MANAGEMENT PROCESS
MAY 15, 2017
ADVISORY, CONSULTATIVE &DELIBERATIVE
Richard 7. Hammer, Commissioner of Transportation & NJ TRANSIT Board Chairman
NJ TRAfVSIT Board of Directors
Executive Management Steven H. Santoro, Executive Director r~►~~r~ ~. ~-i~~~e~G~, ~e~~y~y ~~e~~c~~iv~ ~ir~cfr~r` Todd Barretta, Chief Compliance Officer Michael J. Lihvarcik, Chief Financial (~fificer &Treasurer Joyce J. Zucz~k, Bc~~rd Secr~t~ry
Internal Audit Department Warren A. Hersh, /luditor General Antoinette T. Vll~tsh, Director,. Internal i4udit Steven F. Dei4ngelis, Managing Auditor
NJ DIVISfON OF - LAW: NJ TRANSIT &UNIVERSITY HOSPITAL SECTION Michael Gonnefla, Deputy Attorney General, :Section Chief Joseph Snow, Deputy Afitorney General, Assistant, Section Chief
ERNST & YQtJNG LLP Louis M. Roberts, Partner DRAFT AUDIT REPORT NO.'i7-006
FMLA COIVIPLlANCE MANAGEMENT PROCESS
TABLE OF CONTENTS
PAGE
I. EXECUTI~/E SUMMARY 1
~~. ~l~Tf~~~.~~.1 l~4SQ~T 4~EQGl4~~' — AllQtT ~tESIl~.~S A~itl ~t~EGCIt{LlR!l~~E~tDA,T~aR~l~
A. Explore ~h~ feasibility of Re-Organizing FMLA Compliance Management Processes Into a Single Reporting Department 5
B. Perform a Thorough End-1"o-End Reviewr of the FMLA Process 7
C. Retrain Applicable NJT Employees How to Use KRONOS 10
1l1~ APP~NC,.)~)(— A~1~1T' C1F~IT~RlA At~l~] R/.~TINt~S I~~FIi1~IT1C~~1IS 1
ADVfSORY, CONSULTATIVE & DELIB~aATIVE PRELIMINARY DISCUSSION D R A F T —NOT FOR DISTRfBl.1TION AUDiT REPORT NO. 17-003
FML.A COMPLIANCE MANAGEMENT PROCESS
1. EXECUTIVE SUtYiM~lRY
Management Responsibii.ity Robert Laveil, VP/GM Rai{ Operations Michael P. Kilcoyne, VP/GM Bus Operations . Neal A. Fitzsimmons, Acting, VP/GM, Light Rail &Contract Services Christopher Trucilla, Chief of Police, NJTPD Deborah L. Prato, AED, Human Resources Michael J. Lihvarcik, C~{~ and Treasurer Penelope L, Bassett, AED Gomrr~unications ~ Customer Service
Background In accordance .with the FY17 New Jersey Transit (NJT) Internal Audit Plan, Internal Audit completed an audit of the FML:A Carnpliance Management Process. There have been internal and industry-related concerns and challenges relating to the operational and financial impact that FM~A has on NJT and similar agencies. As part of the audit, I A gathered and validated the sources of avaifabie metrics and data maintained by the business units within NJT relative to the impact FMLA has. on their transportation mode or department from both an operational and financial perspective.
The Family and Medical Leave Act of 1993 (FMLA} is a federal law requiring r~~i~?rnr~i pm~,~n,~~r~ tr, nrnv~r~~ ~m~Ic~yePs with ;c~k~-~rot~cte~ ~nc~ un;c~~i~1 leave for qualified medical and. family reasons. Qualified medical and family reasons include: personal or family illness, family military leave, pregnancy, adoption., or the foster care placement of a child. ThQ Wage and Haur Division of the United States Department of Labor administers FMLA.
The FMLA was intended "to balance the demands pf the workplace with the needs of families"~ The. Act allows eligible employees to take up to twelve work weeks of unpaid leave. during any 12-month .period to attend to the serious health condition of the employee, parent, spouse or child, ar for pregnancy or care of a newborn child, or for adoption or faster care of a child. In order to be eligible for FMLA leave, an employee must have been at the business at least twelve month, and worked at lest 1,2.50 hours(1,000 hours ifi FM~A is for other than salf) over the past 12 months, and worked at a (ocafion where the company employs 5d or .more employees within 75 miles. FMLA leave can be taken either consecutively or on ~n interrnitt~;nt basis. fntermitt~nt FMLA can be taken in whole days ar parts (i.e., hours).
I nternal Audit interviewed key stakeholders in the fiollowing business unity and departments and r~vi~wec~ av~i(~bfe dQG~m~nt~tic~n: Human RPsaur~es, Rail Operations., Bus Operations, Light Rail Operations, Access Link, Transit Information
ADVISORY, C(3NSULTATIVE &DELIBERATIVE 1 PRJELINIINARY DI~CUSSlON D R A F T —NOT FOR DISTRl~UTION AUDIT REPORT NO. 17-003
FNiI~eQ COMPLIANCE MANAGEIV9E~1T PROCESS
Center, NJT Police Department, Finance (Payroll and Financial Operations C~mpRya~ce}, aid ~ommts~}ca#.yo~s ar~d Cr~stomer S~ecrisac~.
The audit was conducted in accordance with Generally Accepted Government Auditing Sfandards (U.S, Accountability Office) and 'the lntern~tional Standards for the Professional Practice of Internal Auditing (Institute of Internal Auditors). These standards require that we plan and perform the audit to obtain sufficient, appropriate evidence. to provide a reasonable basis for our findings and conclusions based on our audit objectives. Internal Audit believes that the evidence obtained in this audit provides a reasonable basis for findings and conclusions.
Purpose and Scope The purpose of this audit was #o determine whether business controls, including the plan of organization, policies and procedures, standards of performance, and records and reports adopted by management, are adequate and effective to address key business risks and ensure that:
• key transactions (e.g., proper completion, approval and submission of key FMLA farms) are firacked, monitored, reported and recorded in a complefie, accurate and timely manner; p process objectives are achieved (e.g., compliance with FMLA relative to eligibility, duration, proper advance notice, impact of FMLA usage on NJT's operating ~~~vi~;~, ~t~.); • key policies and procedures are complied with (e.g., Garporate-wide Policy 3.06A Family &Medical Leave and FMLA Regulations}; • .resources are utilized in a cost effective manner (e.g., paid overtime for FMLA call- outs is actively monitored and mitigated); and, a assets are safeguarded (e.g., key FMLA-related statistics and patterns, related FMLA costs, etc.)..
Note: An audit included in the NJT FY18 Internal Audit Plan wi{I include a review of the FMLA operation impacts and recommendations fia mitigate fihe impacts. NJT I nternal Audit is currently working with the DAG to hirelconsult with an outside FMLA subject matter consultant to perform a thorough review ofi the FMLA prc~c~clures ~nc~ policies that exist and develop recommenda#ions to strengthen NJT processes going forward and minimize the apprational and financial impact of FMLA to NJT operations.
ADVISORY, CONSULTATIVI~ ~ DELIBERATIVE 2 PRELIMINARY DISCUS510N D R A F T —NOT FOR DISTRIBUTION AUDIT REPORT NO. 17-003
FMLA COMPLIANCE MANAGEMENT PROCESS
Conclusion Tk~e audit deter~t~ed tktat business cor~trats foK the ~t~L~l Garn~ttia~ce t~ta~ageme~~ Process need critical strengthening to address :key business risks, .and to ensure key transactions are tracked, monitored, reported and recorded in a complete., accurate and timely manner; process objectives are achieved; .key policies and procedures and/or applicable laws and regulations are complied with; resources are utilized in a cost effective manner;. and, assets are safeguarded.
Specific audit observations include:
1. There is a direct correlation with stricter time and attendance :policies and the i ncrease in FMLA applications.
2. Intermittent FMLA (i.e., using FMLA time in short blocks of time — a day or days, or even hours) is more prevalent afi NJT than the use of consecutive FMLA time (weeks far surgical recuperation, maternity leave, etc.). Ifi was noted that there are instances where employees coil-out to use FMLA time just .before their shift is scheduled. to begin or even after it has begun (e.g., Transit Information Center ~TIC> employees can call-in up to two hours after their shift starts) and indicate they are using F'MLA time, leaving managers with gaps of operational coverage. There ara operational service and financial impacts of this on NJT's operafiing u i'~(~.".7Sv ii.'~s.
3. There appears to be an inconsistency across NJT in the use of applying paid-time off far FMLA days. In certain departments, employees may choose to apply accrued sick time, vacation time or choose not to have the time paid when taking FMLA. In other departments, accrued sick time, vacation time; etc. is applied when the employee takes FMLA.
4. The Timekeepers who track time in KRUN(~S are not fully aware of how to record . FM~A call-outs and associated overtime in the KRONOS program. Also, currently, T&E employees (Trainmen &Engineers} do not swipe into NJT's timekeeping system, KR~N~S; a new KRONOS module with functionality to record FMLA call- outs is currently under review by the Information Technology Technical Steering Committee.
5. There is an inconsistency in the form used for FMLA applications across NJT wifih a more-detailed version currently in use by Bus Operations.
ADVISORY,. CON~ULTATNE &DELIBERATIVE 3 ~'RELIMINARY DISCUSSION D R A ~ T —NOT FOR DISTRIBUTION AUDIT R~PGRT NO. 17-003
FML,A COMPLIANCE'MANAGEMENT PROCESS
Overall Risk Exposure: Overall Control Assessment: ❑ Low ❑ Meets Requirements ❑ Moderate ❑ Needs Strengthening Q High (Important) ~ Needs Strengthening (Critical) k~zacess GQ~tsat ~+ttatu~~t~ Levu: ~A~~a+~em~rtt Ftes~a~ses: Q Ad Hoc ~ Accepts ~f Informal D Disagrees Standardized ❑ Monitored ❑ Optimized ❑ N/A
(See Audit Report Appendix for audit criteria and ratings definitions.)
S~!h~??~~t~~ h;
Warren A. Hersh, Auditor Gen~rat
ADVISORY, COIVSUL.TATIVE &DELIBERATIVE 4 PRELIMIN/~RY DISCUSS1t3N D R A F T —NOT FOR DISTRIBUTION AUDIT REPORY NO. 17-003.
FMLA COMPLIANCE MANAGEMENT ~'ROCESS titi. 43~TAS~~EQ A4l~3ST 4~~~'4~tT -- f~,!lDRT ~2~S~Ll~~'~s Q.I~1~1 4Z~GO~AR+t~E~1DAT~4~lS
A. Explore the Feasibility of Re-Organising FMLA Compliance Management Processes Into a Single Repoe-fing Department
Observation 1 There are .approximately -1,500 NJT employees {Agreement and Non-Agreement) currently approved for FMLA, which is more than 10° /Q of the entire organization. The employees are spread across the operating areas, with a high concentration in both Bus Operations and: Raiff Operations. Most of the employees approved for FM~A are using intermit#ent FMLA Isave, .which impacts operations and incurs additional costs for NJT. Processing FMLA applications- and tracking FMLA use is currently decentralized in NJT -and performed in each operating unit. !t was noted that there is an inconsistency between how Bus Operations, Rail Operations and Human Resources tracks FMLA approvals and compliance.
Observation 2 Through testing and observation, Bus Operations utilizes a more formal process for FMLA than other units -from the time a request comes in, to the approval given and the tracking of ensuring the employee is complying with the rules set forth in Bus Operations policies.. and procedures. Bus Operations uses an in-house L~~r ~r~m 4r-~ rto~ ~~`n C~1~~ /~ K! ~r?n~n~ rZr ~~'?,r~~ n~ ~i~Q~~tli~ CY ~I~ fii.J r•Vl~i~~l ^~ l"~il r~ Yt ~` J~ 3 C:i I f l~.{` ~i i:9u C"i t f L,,.Y"'S ~:7 ♦{ c.i'lif lC7 ~,.f ~ Gi C~Y fu management and employees are informed as to their status of unused FMLA days is coming to an end.
Howaver~ due to the increase of 4QQ% in FMLA approvals they lack the staff required, and fear they will fall behind. There is na back-up staff qualified to replace the FMLA coordinator if she were to cell out sick for an extended period, go on vacafiion, or vacate the position.
Observation 3 Although Rail Operations has mechanisms in place to approve and track compliance with FML/~ procedure, it utilizes Microsoft Excel spread~he~t~ to track compliance. Given the volume of employees approved for FMLA in Rail Operations, numerous management employees .spend substantial time tracking FMLA compliance rather than - their normal job duties.
Further, Rail t~7perations staff indicated that there is a lack of funds to hire an Assistant for the FMLA Coordinator. The Raif Operations FM~A Coordinator reports directly to the Deputy Director, Libor Relations. ThQro is no middle management position for this person to report to who would review their work.
ADVISORY, CC3NSULTATiVE &DELIBERATIVE 5 k'4~ELtl~'t~~ll~4~Y QISCU~S4E7k~t D ~ A ~' T — tVlQ~C FOR ~ISTk~IBUTtO~I AU`DIl' REPORT NO, 17-003
FMLA COMPLI~4NCE MANAGEMENT PROCESS
Observation 4 The Human Resources FMLA Coordinator relies solely on management and the payroll clerks that report to them to track compliance with FMLA policies and procedures. There is no follow-up or periodic'(e.g., daily, .weekly) tracking for. corporate employees on FMLA by Human Resources to ensure adherence and campiiance with FMLA policies and procedures.
Further, ~lne 1-iuman Resources ~iViL,~ Coordinator; ~actua~ posifiion: Principal Corporate Policies, 'FN1LA &Reasonable- Accommodation. Analyst) reports to the Senior. Director, HR Business Partner .and has responsibilities other than FMLA. There is no middle management position for this person to report to who would review their work.
fttisks • Higher costs due to ineffective management policy that could lead to, and appears to have led to, employee abuse relative to FMLA. • Increased overtime costs due to the increase in additional staff to cover shifts from FMLA call-outs. • Negative customer satisfaction and public perception due to delays and cancellations of service due to unavailability of rail crews,. bus operations and light rail operators. I nsufficient budget to hire staff that would cover the impact of FMLA caH-outs.
Recommendation 1: NJT should consider consolidating the function under the Compliance Officer. Due to the time it takes to successfully administer FMLA ~r~lici~s and procedures, a single repc~r~ing stricture that umbrellas the entire organization that approves and tracks FMLA provided to employees and ensures compliance with policies, procedures, state and federal regulations should be considered.
Recommendation 2: A staffing assessment should be part of a potential reorganization to ensure there are adequate resources for the FMLA compliance .management process. As mentioned in Observation # 2, each entity fi hat tracks FMLA is short-staffed. A cost/benefit analysis sh~ul~i b~ performed to ensure adequate staffing is available.
Recommendation 3: Automation of the FMLA compliance management process should continue to be explored and implemented as appropriate. Bus Qperations' internally developed automated system has proven to be efficient. and effective thus far, and most i mportantly, easy to use. Consideration should !~~ given to using this system company-wide.
ADVISORY, COPVSULTATIVE ~ DELIBERATIVE 6 PRELIMINARY DISCUSSIOPI D R ~4 F T —NOT FOFt DISTRIBUTION AUDIT REPORT NO. 17-003
FM~A COMPLDANCE MANAGEMENT PROCESS
~a~ac~emer~t 42es~o~s4kxta#~~s: Exe~~ttiue Dtirec~tar, Cle~u~y ~xec~t~~~ ~1i~ectQ~
Management Response:
implementation Date
B. Perform a Thorough End-To-End Review of the MLA Process
Observation 1 There is a direct correlation with stricter time and attendance policies and the i ncrease in FMLA applications. It was noted that certain unions are encouraging their members to .apply for FMLA coverage due to a revised occurrence-based attendance policy. For example, Bus Operations saw their FMLA certifications i ncrease 400% -from approximately 200 applications to 800 (out of approximately 3,500 Operators) after the new, stricter Time and Attendance policy was implemented. Further, .it was noted that there is along-standing practice by the ATU (Amalgamated Transit Union; Bus Union) to encourage employees. to purchase supplemental insurance to provide wage replacement for unpaid ~IVILf~ days.
Observation 2 I nfiermittent FML.A (i.e., using FMLA time in short blocks of time — a day or days, ar even hours) is more prevalent ~t NJT thin the use of consecutive FMLA time (weeks far surgical recuperation, maternity leave, etc.). It was noted that there are i nstances where employees call-out to use FMLA time just before. their shift is scheduled to begin or even after it has begun (e.g., Transit Information Center
• In ~~as C~~er~ti~ns, FMLA call-oufis result in missed trips and additional overtime to provide a replacement for the employee who has called out.
• In Rail C?perations,.there are. approximately 50Q open intermittent FMLA cases. FMLA call-outs result in short-staffing on the trains, potential cancellation of service due to crew unavailability, delay- in making mechanical and signal repairs and incurring overtime expenses to provide crew replacements.
ADVtS~RY, Ct~NSULT'ATIVE &DELIBERATIVE 7 PRELIMiP1ARY DISCUSSION D R A F T —NOT FOR DlSTRIBUTlON AUDIT REPORT NO. 17-003
FMLA COMPLIANCE MANAGEMENT PROCESS
• ~in Light Raii Operations; for the Newark Line, one-third of the Operators are apprt~ved for FMLA. FMLA call-outs result in paying overtime incurred to cover fihe shift. In addition,. Light Rail'- has also had to widen the length of time between trips when they are short on Operators.
The TIC group has 14 employees on FMLA out of 50(28%) They fallow the Bus Attendance policy and have also seen an increase in FMLA applications under the stricter Time and Attendance policy. From a service impact, they noted that customer wait times. on the phone increase when they are short-staffed. However, this has been mostly mitigated by self-service features in their inter- active phone system. The TIC further noted that there are also four employees who essentially work part-time hours due to MLA callouts and yet receive full- tim~ benefits from 4~J3.
I n the Payroll Department there is no overtime being incurred as a result of employees on FMLA. However, the. workload is increased for the remaining employees that eeport fio work, and it was noted that they get disgruntled with their co-work~r(s) due to the additional workload they have as a result of employees not coming to work:
Access Link's Gall Center (30 employees) is impacted by the employees they have on FMLA (five). Access Link incurs overtime to accommodate for staffing ~~° ~u~ia~~~ ~i~e~ his ~1 ~~~r~~~r~ar~y uvurker~s c~r~ coil ~o help. Access Lin(K also reported that in addition to FMLA, they are impacted by employees who are put on leave through the Employes Assistance Program. They reported one case where an employee has been are FMLA (through re-certification) and other leaves (such_ as SAP}for more than six years and remains on NJT benefits.
The use of the same doctor to complete the FMLA applications: Although not a confirmed issue in Rail or Bus Operations, far the TIC group, there is a good portion of the employees that use a physician in Irvington, NJ to approve their FMLA application. A concern was expressed that this physician's Office Assistant may be completing the FMLA applications, potentially without physician's knowledge or consent. observation 3 T here is an inconsistency in the form used for MLA applications. Bus Operations has their own mare-detailed version while a(I other departments use the standard FMLA application farm that is found on @transit.
ADVISORY, CONSULTATIVE & DELIBERATIVIE 8 PREL.IMIfdARY DISCUSSION D R A F T —NOT FOR DISTRIBUTION AUDIT REPORT NO. 17-003
FMLA COMPLIANCE MANAGEMENT'PROCESS
Risks: • Higher costs due fio ineffective management policy that could - lead to, and appears ~o have lets to, employee abuse reiafiive to ~rt~l.F~. • lncreased overtime costs due to the increase in additional staff to cover shifits from FMLA call-outs. • Negative customer satisfaction and public perception due to delays and cancellations of service due to unavailability of rail crews,'bus operations and'light rai{ operators. • Insufficient budgefi to hire staff that would cover the impact of FMLA call-outs..
Recommendation 4 F~eview and update Corporate FMLA policy (3.06). Ensure that it states for all NJT employees (Agreemenfi and Non-Agreement) haw accrued sick time, vacation time, etc., will be applied to FMLA call-outs directly within the policy.
Recommendation 5 Corporate Policies 3.06 Personal, Leave of Absence, 3.1.2 Attendance and Hours Worked and x.19 Sick Leave only apply to non-agreemenfi employees. Considering that the majority of NJT employees(and FMLA applications-and related issues) are agreement employees, those polices should be reviewed and updated to a~piy to both agreement and' non-agreement employees as permitted under current Union Agreements, or revised appropriately through addendums to Union Agreements.
I nternal Audit has completed some preliminary work in the preparation of the FY18 I nferno! Audit Plan and has identified two potential policy improvements for consideration to help mitigate the im{~act. Tl~~y include: (1) requiring more frQquPnt recertification for intermittent leave rather thin the one-year recertification process in place today and (2) update the po3icy to allow NJT management to visit employees an FMLA leave at home during the leave.
These should be assessed in context of the agreement contracts as well as the i mpact on non-agreement employees.
Recommendation 6 Review the two FML.A A~~alication farms, fi he one in use by Bus t7perations and the standard NJT form,. and develop and implement one form far consistent use across NJT.
Management R~sponsibility: Executive Director, Deputy Executive Director
Management Response:
ADVISORY, COIVSULTA~TIVE &DELIBERATIVE 9 PRELIMINARY DISCUSSIQN D R A F T —NOT FQR DISTRIBUTIQN AUDIT REPORT NO. 17-003
FNiLA COMPLIANCE MANAGEMENT PROCESS
I L APPENDIX —AUDIT CRITERIA AND RATINGS DEFINITIONS
Overall Risk. Exposure I dentifies the level of potential significance of evenfi(s) and/or actions} that could adversely affecfi NJT's operations and/or customers.
Ratite _Descri for Definition Risks may cause minor losses or system 1 Low damages, damage, minor ro ert damage, minor in'uries or illness. Risks .may result in increased costs, missed deadlines or 2 Moderate sacrifices in optimization; and, .may resuli in the costly foss of assets ; .impede the or anization's mission andlor re utation. Risks may result in significant costs, missed deadlines or sacrifices in optimization; and, 3 High may resu{t in the costly loss of asset(s), major property damage, serious injury, and/or impede the or anization's mission and/or reputation.
Overall Control. Assessment Identifies the effectiveness of the system of internal controls and risk management sCF ^sC^~~.~i"~.-'.~i ~^v ~iic~i,'ri~~i i4i~ {Cv~"ii C1~ io'Su~ E.~`~ <~.i c~i~ c~C.i,~1`~IGU~~ `~~'`ti~~ 1~~:.+~.~3 Glf ~f~~ objectives, scope,.and conclusions of the detailed Internal Audit work plan
Ratin De~cri fior Definition ~~ Risk Meets managPm~nt and control processes are adequate and effective far the ~ Requirements level of risk identified. There may be some minor. corrective action. Risk management and control processes need to be Needs strengthened in important ways to reach "Meet: Requirements" 2 Strengthening level. The number and. nature of deficiencies andlor (Important) recommendations require. prompt managemenf attention to reduce exposure fio an acceptable level. Risk management and control processes are clearly deficient in Needs critical ways exposing. the organization to an unacceptable risk 3 Strengfihening level. The number and nature of deficiencies and/or (Critical) recommendations require substantial management attention. I mmediate corrective action is essential to prevent further deterioration.
ADVISORY, CONSULTATIVE &DELIBERATIVE 12 PRELIMINARYDISCUSSiON D R A F T— NQT IFOR DISTRIBUTION AUDIT REPORT NO. 17-003
FMLA COMPLIANCE N3ANAGEMENT PROCESS
Process Control Maturity l.evei I dentifies the level of the process control formalization and sustainability to efFectively manage risks and achieve objectives. (All processes should strive for Level' 4, Monitored. However, processes may also achieve an Overall Assessment of "Meets Requirements" with a maturity Level of 2 or 3 in relation to the risk exposure.)
Level D~~cri for ~ Definifion ~~ Unpredictable environment where controls are not designed or in place. 1 Ad Hoc -Success depends on exceptional and seasoned managers and cannot be repeated without the same competent individuals. Controls are designed and in place but are not adequately documented. -Controls mostly dependent 2 Informal on people. - No forma! training or communication of controls. - Standard processes are established to allow for repeat of past results. ~__ Controls are designed and in pace. - Controls have been documented and communicated to 3 Standardized employees.
v~V v{c~~i~4~'Y3.`'r ~!'"viil Gv~ir~'vf~ f~ic~y~ r~' l /Jl~~' ~~C~~.t~U. Trainin is tanned and rovided according to roles. - Standardized controls with periodic testing for effective design and operation with reporting to management. Deviations from wiH be 4 Monitored ~ controls identified, Automation- and tools may be used in a limited way to sapport controls. Performance measures are introduced. An integrated internal control framework with real time monitoring by management with continuous improvement. 5 Optimized -Automation and tools are used to support controls and allow the organization to make rapid changes fia the control activities-if needed. N/A Nit h1r~t .annlirahlA fnr thr~ anr~anpmpnf
ADVISORY, CONSULTATIVE & DELIBER~4TIVE 13 From: Barretta, Todd C. fCEDOTC6~ To: Hester, Laura L.(CPOLLLHj Cc: Truciilo. Christopher (CPOLCXl') Subject: Grievances Date: Monday, May 1, 2017 12:07:00 PM
Good Morning Chief(s),
would like to schedule a time as soon as possible to receive a confidential briefing on two separate cases related to disciplinary proceedings against police officers related to drug and alcohol testing.
The first has a grievance date of September 25, 2016 following a reasonable cause drug or alcohol test and the second is dated January 17, 2017 following a random drug/alcohol test.
These two matters are among those selected for Audit by the FTA next week.
Thanks
Todd
Todd C. Barretta Chief Compliance Officer NJ Transit One Penn Plaza East Newark, NY 07105 (973) 491-7821 (o) (201) 988-3358 (c) CBarretta(n~n itransit.com
~`n~ ~~r~y r~ ~~~ ~ ~
1'O: Mr. Steven Santoro, Executive Di
FROM: Todd Barretta, Chief Compliance
DATE; June 2, 2017
SUBJECT: Preliminary Discussion DRAFT R DRAFT IA REPORT NO. 17-006
VIA EMAIL AND INTEROFFICE MAIL - CONFIL~... „--.~
On or about May 17, 2017, NJTs Internal Audit Department (IA) issued the abo~ referenced preliminary discussion draft report following the conclusion of an initial internal audit of NJTs compliance management process with respect to the Family Medical Leap Act (FMLA). The undersigned has reviewed this draft report and respectfully provides comment and feedback on its contents below.
Additionally, the undersigned kindly proposes the hereto attached draft response to be issued to IA on behalf of the ED in and as managements response to the preliminary discussion draft report. Contemporaneous with the issuance of the abo~ captioned Draft IA Report, (the "report") the undersigned commenced his own preliminary inquiry into NJTs FMLA Compliance practices at the request of the DED i n partial preparation for an external investigation of NJTs FMLA Compliance practices by the United States Department of Labor. The result of that preliminary inquiry is duly incorporated herein.
I n many regards, the observations, recommendations, and conclusions contained in the report parallel -- at the ~ry least align with -- those made and/or drawn by the undersigned as part of the Chief Compliance Officer's initial inquiry into and orientation to NJTs FMLA policies, procedures, and practices. AncF unfortunately, the prevailing themes dominating the perceived weaknesses and deficiencies therein are not entirely unique to the mans ement of FM liance u r er repres sere i7iarn es ssues coupled with defects in mindset and an o~rall poor corporate culture that permeates an plagues our organization. ° `~
~~r all intents and purposes, NJT does not fully capitalize on synergies between operating and administrative departments nor does it make use of efficiencies that can be readily gained through economies of scale resulting from ~e centralization of the management and administration of tasks common to all business lines. Instead, the business lines operate independently of each other, and with limited corporate oversight. Moreo~r, the prevailing attitudes and beliefs proacti~ly prevent ari efficient allocation of resources with the various department leaders preferring to isolate their operations and conduct their business within a tightly controlled and seldom breached silo. This results in duplicati~ efforts t and process inconsistencies across the organization.
~~ Additionally, since central coordination and o~rsight (where a true subject matter expert (SME) would and should reside) are often absent and operational budget constraints pre~nt employment of a real SME by each department (rightfully sc~), eacf7 business operating line, instead, self-proclaims one of their own as a designated SME ern though this person may or may not have e~;r had any formal training or educa#i~an on the subject matter and e~nen though their role as a particular SME may be conflicted with and/or in addition to multiple other roles. This selfiproclamation serves to only further strengthen the walls err~ircliny the siloed department and results in key stakeholders becoming even more resistant to assistance and efforts to vertically integrate the NJT Corporation.
Specifically, with respect to FMLA compliance and as accurately described in the draft report, NJT lacks a central authority instead choosing to manage and administrate three separate, disparate, and widely varying programs, each with varying degrees of success and none without some fatal flaw. The end results i n NJTs failure to uniformly apply NJT policy across departments and an inability to consistently comply with the statute. The lack of coordination, coupled with staffing deficiencies and a failure to train supposed SMEs, all of whom previously had little to no experience with FMLA leas NJT greatly exposed to a high le~l of risk resulting from this large employer's non-compliance with the statute. At the same time, a general lack of understandings of the statute has been exploited by employees, particularly those cored by a collecti~: bargaining agreement, perhaps upon instruction and encouragement by the labor unions and perhaps in response to changes in time and attendance policies. In any e~nt, this has ern further elevated the risk and exposure of NJT for non-compliance with the FMLA statute as our weaknesses have not only fostered a culture of FMLA abuse which has impacted service, safety, and o~rtime costs, but has also led to an inquiry and pending investigation by the U.S. Department of Labor. It is likely that the NJ DOL may also follow suit for a review of compliance with NJ FLA.
The methods used to track and record FMLA cases is also widely varying across business lines. Bus is the closest to employing a best practice through their use of a customized app, de~loped in house by NJT IT to firack FMLA compliance requirements on a case by case basis. This is not a perfect system, nor is it particularly robust and it certainly lacks the advanced functionality and features of commercially available mainstream packages developed explicitly for FMLA purposes; however, it is a remarkable impro~ment oar the paper system and cluster of word files, PDF forms, and excel spreadsheets utilized by HR and Rail. Unfortunately, like most other disparate systems, the undersigned did request a demonstration of the system and access to its content but this request, to date, has been largely ignored by those controlling access to the systems. Should the recommendations of this report he implemented the undersigned would consider expanding the functionality of the bus system and working with IS on an upgraded rollout but would also weigh the time and cost factor against implementing a mainstream software solution —ideally one that is fully integrated "with the Kronos timekeeping clock and payroll system. These products have already been dewloped. In any e~nt, FMLA should and would be recorded and tracked in one system for all employees.
I n what can be described only as an example of the most ironic oversight and statutory non-compliance, (VJTs leniency results in a truly off the charts rate of employees appro~d for FMLA (some 1500+); but at the same time, iYs inconsistent and uninformed application combined with poor, sloppy, and fragmented administrative practices and procedures also results in one or more regulatory instigations into those few cases that have been denied.
The report lists ten detailed recommendations to management and centrally concludes that management perform a thorough revisvv of NJTs c~r77pliance practices with the act and consider consolidating said compliance function under the Compliance Officer. For all of the foregoing reasons, the undersigned Chief Compliance Officer urges the Executi~ Director to adopt said recommendations and the CCO is ready and able to accept responsibility for this function across the entire organization. The CCO belies that he can markedly impro~ NJTs statutory compliance and once centralized, can ease the administration of our FMLA program. As such, the undersigned respectfully encourages the Executi~ Director to issue a management response to the report in a form which is substantially similar to the following proposed preliminary discussion draft management response to the report.
~ Significantly, the CCO respectfully notes that he corr~piled a referer7ce guide and set of best practices ice use by those individuals tasked, inter alia, with purportedly administering IVJTs FMLA program and that this standard reference material was previously never distributed to responsible personnel. PRELIMINARY DISCUSSION DRAFT
I n re: Audit Report NO. 17-006
Management Response
Executive Director of NJ Transit, Steven Santoro respectfully responds to the abo~ captioned report issued by the Internal Audit Department of IVJ Transit as follows:
Explore the Feasibility of Re-Organizing FMLA Compliance Management Processes into a Single Reporting Department
Management Conclusory Response Management accepts the o~rall recommendation of IA to explore the feasibility of reorganizing the FMLA compliance management process into a single reporting department.
Response to Recommendation 1: NJT will begin the process of consolidating the function under the Chief Compliance Officer ("CCO") who reports directly to the Executi~ Director. Management will provide the CCO with the necessary staff, budget, tools, and resources to properly execute the function. The CCO will ensure that NJTs FMLA policy is current and in compliance with the statute. He will further see to it that the policy is applied consistently and uniformly to all employees and across all departments; and that transactions are tracked, monitored, and properly reported. Finally, the CCO will strengthen all business controls for the FMLA compliance management process to reduce key business risks caused by FMLA compliance and excessive employee absenteeism.
Response to Recommendation 2: Through reassignment and/or newly hired staffed, the CCO will ham sufficient staffed to administer NJTs FMLA compliance program.
Ftesponseto Kecommendation s: The CCO will be tasked with ensuring that FMLA compliance is executed in the most efficient and effective manner. The CCO will explore expanding the use of the system currently utilized by Bus Upera~ions anti wiii also ee~nsiaer cornrr~ercialiy avaiiauie su~virar~e airern~fives. i~7 seie~finy a company-wide FMLA compliance system, the CCO will consider such factors as the user base, ease of use, extent of automation, record keeping and audit trail capabilities, and ease of integration with other tools and systems currently used and planned for use by NJT including the Kronos timekeeping system.
I mplementation Date: Consolidation will begin on or before September 1, 2017 and will be targeted for completion by the end of calendar year 2017. The CCO will deli~r anew or expanded FMLA compliance software solution thereafter upon an agreed timeline.
Perform a Thorough End-to-End Review of the FMLA Process
Management Conclusory Response Management accepts the overall recommendation of IA to perform a thorough review of the FMLA pracess.
Response to Recommendation 4: Corporate FMLA policy #3.06 will be reviewed and updated accordingly depending upon input received by the CCO and any outside consultation already engaged for this purpose. Response to Recommendation 5: Corporate policies 3.06, 3.12, and 3.19 will be reviewed and updated accordingly depending upon i nput recei~d by the CCO and any outside consultation already engaged for this purpose. Moreover, a committee will be formed to explore expanding the scope of these policies (and any subsequent updates and revisions) to employees cored by the terms of a collective bargaining agreement within the context of said agreemen4.
Response to Recommendation 6: The CCO will be tasked with reviewing and updating all FMLA related forms currently in use and will explore the feasibility of using one form only across all departments.
I mplementation Date: A comprehensi~+e review of FMLA compliance and practices will commence immediately under the direction of the CCO and this process is expected to conclude before the end of calendar year 2017.
I II. Retrain Applicable NJT Employees How to Use Kronos
Management Conclusory Response Management accepts in part and rejects in part the o~rall recommendation of IA to retrain applicable employees on the Kronos system.
Response to Recommendation 7: Management will consider the use of implementing the KRONOS system for T&E employees; howe~r, management has been advised that this implementation is not feasible at this time as scheduling information for T&E employees is fed from other critical transit train management systems.
Response to Recommendation 8: Time clerks, in addition to their current procedures, will be instructed to report FMLA call-outs to a central person designated by the CCO who will record and track the absence in a centralized FMLA compliance system.
I mplementation Date: Recommendation 7 will not be implemented until following any requisite updates to NJTs TMAC and SCAC~/~ systems. i ime clerks will not be retrained; however, will pe required fo report the absence to the new centralized department immediately following and/or concurrent with the i mplementation of objective II abo~.
G!
(~y TRANSIT r ~
1'O: Mr. Steven Santoro, Executive Director
FROM: Todd Barretta, Chief Compliance Officer
DATE: March 10, 2017
SUBJECT: Status Report 1
VIA EMAIL AND INTEROFFICE MAIL.
Please accept my sincerest gratitude for both this tremendous opportunity which you have provided to me and for the warm welcome I have received from you and your staff. look forward to a making a significant and positive impact on the organization.
Attached hereto please find an informal report summarizing this first week of service. have asked Jackie to help schedule a time for us to meet alone whenever your schedule permits.
have thoroughly enjoyed my first week at NJ Transit while meeting my new colleagues and acquiring the knowledge I need to best serve you.
Very truly yours,
Todd C. Barretta
Enclosure (1)
1 Executive Report's Report —Progress, Plans, &Problems (PPP)
For the ~nreek ending 3/10/2017
T'o: Executive Director
From: Chief Compliance Officer
~_ EXECUTIVE SUMMARY Today marks the successful completion of my first week as NJ Transits new Chief Compliance Officer. This reports aims to provide the Executive Director with a summary of my most recent activity and it describes the short and long term vision I hold for NJ Transit's compliance department and the role I plan to play in the organization.
ACTIVITY OVERVfEW These first few days were primarily dominated by introductions, orientations, information gathering exercises, technology setup, and new employee processing. In addition to the meetings I attended with the ED, including the NJ Transit Board Meeting, I met individually with several key employees throughout the week.
My ~ge~~+a fer ~~~h ~eetir~C f~cuseu ~r ~b±~ininr ~ h~rh !eve! Qvervievv ~f the N~~ine~~ u nits, receiving an in depth explanation of the legal and regulatory compliance functions and obligations contained in each unit, and learning of any needs for improvement. These face to face meetings with my new colleagues lasted approximately one hour each.
also took part in my first project in which I advised upon and actively participated in providing our response to a request for production of documents made by the Office of the State Comptroller regarding HBLR. Finally, on Thursday I attended a fraud prevention presentation by W. Hersh and on Friday, between scheduled meetings was able to sit in as revisions were made to our responses to the legislative inquiry questions. ------C~t~TA,GIfS A~11~ A,P~'0~~1~~1II~~IT'~ 1 Monday G. Vrabel, D. Graham, G. Obert, J. Kanc Individual -Maplewood & Newark HQ Tuesda S. Santoro, A. Herbold, P. W ckoff Grou —Newark HQ Wednesda Audit Committee, [3oard Meetin , K. Rotter & M. Strickland Grou —Newark HQ Thursda Fraud Trainin , E. Un rand , K. Rotter Individual —Newark HQ Frida G. S elrum, C. Trucillo & L. Hester, J. Zuczek Individual —Newark HQ
2 NEXT WEEK'S PLAN A busy week is planned and includes more one hour one on one sessions with senior leaders and several group staff meetings and round table discussions. I also hope fio gain access to and familiarity with our information systems and applications. A tentative schedule is as follows:
Monda Staff Meetin , Ca ital Plannin R/T, G. Tabon Tuesda M. Sla er, P. Bassett, N. Fitzsimmons, S. Dra zen Wednesda BD. Comm CSV & Admin , M. Kilco ne, B. Lavell, M. Lihvarcik Thursda M. Gonnella, D. Prato Frida W. Hersh 2 Hrs
AREAS OF CONCERN Several immediate compliance and potential risk management issues, inter alia, were revealed during the course of my information acquisition including document storage, retrieval, and review; the coordination of response to official inquiry; processing of employee background checks; and management of contracts. I will elaborate on all of the following when we meet again and will formally address in a forthcoming proposed comprehensive compliance plan.
30 DAY GOALS Over the next month, I hope to complete initial and follow up meetings with senior leaders a nti subordinate empioyees. Subsequent meetings with Yocus so~eiy upon the ~e~aiis o~ how each business unit performs their required compliance functions. I hope to become better acclimated with our existing tools and resources. I will continue to familiarize myself with all of the statutes and regulations governing NJT while ramping up my knowledge of internal regulations, policies, procedures, and controls. I will thoroughly review the results of past internal audits and any derogatory regulatory findings and reports.
By this time, I hope to have full and unfiltered access to each department, physical localities, and systems and applicatior7s and be provided wifih the fully functioning tools and resources that- need to be procured for the compliance department.
60-90 DAY GOALS Having spent the first month+ focused internally, I hope to utilize the second and third month discovering and building key relationships outside of our organization. I hope to meet with representatives from all of the federal and state regulatory agencies which we deal. I also
~3 would like to be introduced to NJT's most important vendors. I will become involved with APTA and other industry specific associations while also introducing NJT to some of the relationships have already built in the compliance industry. Finally, I think iYs prudent and wise to befriend (or at least meet) my counterparts at other major providers of transit and transportation.
90-180 DAY GOALS At the three to six-month interval, in addition to mastering all of the above, I will present the ED with a proposal for the implementation of a Compliance Program and will draft the according plan. Said plan will fully analyze and address the full compliance needs across the entire organization. It will detail my full vision for this compliance department by simultaneously addressing current and future needs against anticipated resource requirements. The proposed structure and organization of the department will be detailed.
The plan will make provisions for providing all of the following services to NJT and each of the business units: standardization, process revision for best practices, staff training, support to all business unit's subject matter experts, requisite _policy changes, periodic audit and review, and the full and active management of all regulatory relationships.
LONG TERM PROJECTS &PLANS
During the second half of the first year, I will continue to revise and improve the compliance plan as our needs evolve and our performance is measured. By now, I will have a full understanding of our compliance requirements and will have been repeatedly assisting the business units ensure that their compliance needs are met efficiently and effectively. After all of the compliance routines are fully documented, understood, practiced, and validated, I will begin to automate the program and improve efficiency and effectiveness by leading the implementation of an enterprise wide compliance management information system from a leading software provider.
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r . ._. ._ ...... Nance fio Individual Regarding Viola#ion{s) of Federal SEC]UENTfAt~CALENOAR Y~^R "o. U,S. CSepadmeni of 7ranepattalion Railroad Safety or Hazardous Materials Transportation FederaE Railroad Administration. S~atUt@S, Regulations or Orders 17- 02- 03 The Federal railroad safety and hazardous materials transporfetion laws authorize the FedeCal Railroad Administraf+nn (FRA) to bring enforcement actions directly against individuals who violate those laws. lndividuais who willfully violate fhe railroad -safety laws or who knowingly violate She hazardous materials transportation laws are subject to civil penalties oP up to S1p0,000 per violation. Individuals whose violations) of those ia~ws are shown io make fh~m unfit fpr the pe~'ormance of safety-ser7sitive funGfions are subject to suspension ar disqualification from such service:(Willful violations of the hazardous materials transportation laws siibjecf an individual to passible criminal sanctions.) if you have questions about the taws pertaining to railroad safety or hazardous material transportation, contact the officer of your employee responsible for safety matters or the cipsest FRA office. FRA has reason to believe that you violated the statute, regulation ar order described. below. Box 4 below indicates whether or not a violation repod recommending enforcement action will be sent fo FRA's Once of Chief Counsel. IE the t~ox is checked "YES," you will be hearing from that office as to what action will be taken and will - have an opportunity to respond at that time. ff the box is checked "NQ," you should consider this a warning that any future violations you may cammikwiil rasult in enforcement action. In the case of a warning, you may suhmit any information in explanation or mitigation to the Regional Administrator at the address below. A copy of this notice will be provided to your employer, and in the case ofjoink operations, to the railroad rEsponsible for the operation. PRIVACY ACT NQTICE: Under authority of the Pederai railroad safety and hazardous materials transportation laws, FRA collects the i nformation on this notice for inclusion in its records concerning violations of fhe Federal railroad safety and hazardous materials transportation laws by individuals, 1'ho~e ~eaor~G- r?~ay be uses :a supNort enfctcsmert actions agairtsi i~~dividuals and may bz disclosed to other government agencies, the public. the railroad industry, or Congress in the interest of prbrrioting compliance with the safety lativs. Disclosure of yau~ social security number is voluntary and would be used to distinguish your compliance records from those of someone with the same name and date of birth.
1. SUBJECT: 2. VIOLA7I~N OF 49 CFR: 3. X6180 REPORT 4. VIOL:/CHIEF TYPE & NO: COUNSEL PERSONAL ELECTRONIC DEVICE wnRNirt~ ~~rr~R -USE ON A MOVING lI;ATN RECbMMENDE~: 2~0 j 3-0S a ~6 - 19 ~yEg ~p
5. NAME Cast SIMPSON ~FirsE: PETER ~9 N7idd/e Int.: s. HOtviE Strest:51 S NORWOOD STREET ADDRESS City. EAST ORANGE State; NJ zrp Code:. 07 018
7. SOCIAL SECURITY NI;MQERIEMPLUYEE ID NUMBER: 10. TIME AND DATE ~F V(~IATiOH 345350 Time: 11 ; 00 attt pate: 0&/29./16 8. DATE OF BIRTH (mm/ddryy} 8. JOB TITLE qF INDIVIQUAL: 01/ 2 6 / 5 7 CONDUCTQR ~ 17.17ME ANU QA~CE INDIVIDUAL NOTIFIEQ i2. ~.i~~rl7iGiv GF ViUi.i~ iiU~v GS.v Cvuc is. OPEiv~Tir1G RR C~~G: 17 • 05 c11T1 29 ~ 16 city or Time: fete: G fi j MONTCLAIR NJ~'R County: 199 0 15. EMPLOYING. RR 16. EMPLOYING DIVISION 14: OAR DIVISION COGS: state: NEW ~7ERSEY 34 NEC~1A171~ NJTR NT~WARK _._w._~_...... _...... ~_,...... _. _ .____ 17. SUMMARY OF VIOLATION: OPl WEDNESDAY JUNE 29, ?01.6 ZEN ODISOARD INSPECTION 4F A NEt~l JERSEY TE2~I.NSTT PA55ElVGET2 TRAIN RiTNP1ING FROM PENN STATION TO UPPER MONTCLAIR OBSEF.VED A CERTIFIED CONDUCTC7R WHG WA5 G]ORRING ~1S TF3E TICKET COI,L~CTOF2 OAT TRAIN 6233 TALKING QN HIS PEI2SfJhI~ C~'LL PFi(7I~rE ~N A P~(C7VINC TRA.IA7, 4JI-1'~N ~JL7ES'?'IC.)t~TED ZkBOUT TF•iE CELL PHONE CONVERSATION PETER SZMPSON STATED THAT I'I' WAS HIS PERSOD77aL CELL PT-IC~NE AIQD THAT HTS WIFE CALLED HIM. THE EMPLOYEE WF1S E3RIEI'~D ON TILE FEllERAL R.EGUI,A'I'ION, ~TJT' S ELECT1201VIC DEVICE POI,TCY ANI7 ASKED Tt7 COMPLY. THE EMPLQI'EE ~1CIthTpWLE1~GED THAT I-IE VIOLATED TI3E POLICX, APt7LOGIZEt~ ANTI STATED THAT HE WOiJLD `I'UKN Ok'F HIS CELL PHONE AND STORE IT WHERE IT BEI:,~NGEI?. I'T-I12EE FRA INSPECTORS WERE INVOLVED ZN TFiE INSPECTIOiV AND WITI~TES5EL7 THE INCIDENT'.
18. NAME 0~ iNSPECTOR(S)ISPECIALIST(S) I. D, Number NAMElADQRES5-Regional AdministratorlStait Director Sean Fitzpatr~.ck 28050 LES ~'IORENZO 55 BROADWAY, 10`I'I-i FI~O~R ~7T.M F-IEA7.,FY 377~Q CAMI3RTDGF~, N1.A 0?~.4?..
Da e Report Prepared Date Report Mailed Registered Mail Number
Signature of Mspectnr(s)JSpeciaiist(s) pate 5ig~ature of Regional Administrator/Staff Director C~,-~_~,.,wv.5,-,~...,.,,,.,,,..w.,~~.y:taty ~~m NGY:frt.i[~.irt: G'( f HACnmNuJeNP. w~•~~~:4 i~Ai:umtn i;i~~'Nq. T AMES K HEALEY m.in.Mtsa,~~n~~ o,,~~: in ~ ~r.w nx wszsx ~n~ - ~~~~ ~~
=orm FRA F6180.80 (02-O~J) X0024 7—m-:54tl REGIQNlMQ'S Notice to Individual Regarding 1/iolafion{s) of Federal s~~u~N-r~a~ca~.~NnaR YEAR "o. U.~u.-Department of 7ransPortaUan Railroad Safety or Hazardous Materials Transportation- 17- 02 - Ol Federel Railroad Administration ~f~tU~EB, Regulations or Orders The Federal railroad safeky and hazardous materials transportation laws authorize -the Federal Railroad Administration (FRA} Yo bring enforcement actions directly against individuals who violate those laws. individuals who willfully violate the railroad safety laws or who knowingly violate the hazardous materials transportation laws are subject to civil penalties gf up to $1p0,000 per violation. individuals whose uiolation(s) of those laws are shown to make them unfit for the performance of safety-sensitive functians are subject t~ suspension or disqua{ification from such service,(Willful violations of the haaardous rrrateriais transportation laws subject an individual to possible criminal sanctions.) Cf you have questions about the laws pertaining to raiiraad safety or hazardous material transportation, contact the officer of your employer responsible for safety matters or the ciasest FRA office. ~'RA has reason to believe that you violated the statute, regulation or order elescrib~d below. Box 4 below indicates whether or not a vialatian report recommending enforcement action will die -sent to FRA's Once of Chief Counsel if the box is checked "YES," you will be hearing from Yhat once as to what action wiA be taken and will have an opportunity to respond - at th2t time, if fhe box is checked "NQ," you should consider this a warning that any future violations you may commit will result ~n enforcement action. in -the case of a warning, you may submit any information in explanation or mitigation to the Regional Administrator at the address below: A copy of this notice will be provided to your employer, and in the case of joint operations, to the railroad responsible for the operation.
PRIVACY ACT NOT(CE: Under authority of the .Federal railroad safety and - hazardous materials trarrsportafion laws, FRA collects the information on this notice for inclusion in its records concerning violations of the Federal iailroad safety and hazardous materials transportation laws by individuals. Those records may be used to support enforcement actions against individuals and may be disclosed io tither government age^cies, the p~~blic, the railroad industry, or Congress in the interest of promoting compliance with the safe#y laws. gisciosure of your social sectuity number is voluntary and would be used tv distinguish yavr compliance records from those of someone with -the same name and date of birth. 1. SUBJECT: 2. VIQLA'T'IQN OF 49 CFR: 3, X6160 REPpRT 4. VIOL/CHIEF 'E'YRE & N0: COUNSCL . PERSONAZ EI.,ECTR~NIC DEVICE WARNIhiG LETTER USE ON ~. MO'VING TRAIN ~ecor,~Mer~o~~: z2o cos a 96 - 59 Qy~g ~p 5. NAME SANTIAGO JESCJS Last: ~Firsf: ~ Middle 1nt.: 6. HOME street:ll FREDWOOD PLACE APT 6F ADDRESS City: ~~AW~ State: N'3 Zip Gade: ~7 7 4 7 7. SOCIAL SECURITY NUMBER/EMPLOYEE ID NUMBER: 10. TfME AND DATE OE VIOLATION 4 a ~.~ ~. a ~~me: ~.:i,: 4~ min Oate: d ~ ~~ ~f ~ ~ 8. DATE OF 61RTH (mm(ddlyy} 9. JOE3 TITLE.OF_.INDIVIDUAL: (`UL~11)IIC:`lUh' ~ 11. TIME AND DATE INDIVIDUAL NOTIFIED
72, LUCA~~flt7(~! OF. VIOL/~TIC?N GSN ~(Jt~E ~. C~NERATfh1G kht CODS; t 'a' Q c3TTt ~4 ~ 1 ~ city or Time: -~ ,~. Date: Q ~ J~ NEW YORF~ NJTR County: 417 p 15. EMPLQYING RR 16. EMPLOYWG DIVISIpN 14. OPR DIVISION CQDE~ State: NEW YORK 36 NEWARK 1'~TJTR NEWAIK 17. SUMMARY QF VIOLATION' WIIIL~ PIDING TRAIN 3II3G, IN~PL:CTOP. I3. RQSS I~ND T Z~7FRE S'Z'hN17INC IIJ Ia VESTTBTJL~E: AS THE. `S'RAIN ARRIVED AT THE 5'PATTON ALONG t9ITH OTTiER PASSENGERS VdAi'I'TNG FnR THE TRA:[:N TO STQP, AND TF3E I~QO~S TO QPEN. CONDUCTOR JESUS SAhT`I'TAGO t^]ALKED IN'?'0: TIDE VESTII3[7LE AI3D T ASKED I-~1:M IF' HE; N~'~~L7EI) `1'O GE':[' `l'U '.1"HE POWER llC)QI2 CC?NTROLS, SINCE I WAS STANDT.S~TG I~ FRONT OF 'TTiEM. 7-IE SA:I:1J 'l.'T-IA7' ~I'~a D:L"t7 N07'. IT' WAS AT THE PO:[:N'I' I NOTICED THE CFI,I, Fl-iCN~: IN HIS CI~tES'T' AdCKN'T'. AS WE PULLED INTQ NEW YORK PENDi STA'T'ION FIIS CrIEST PCJCKET 13EG"AME ILLUMINATED ANIJ THE SCREEN ON THW 1'T-IONE STARTED I~I,ASHING AS TF RIlVGIIVG. QNGE THE TRAIN S"C'OPP~L7 AND 'T'HE PASSENGERS DISEMSARECED, 6VE SPOi 18. NAME OF INSPECTORS}/SPECIAIiSF(S) I.D. Number NAMEIADDRESS—Regional Administrator/StaN Director PATRICK VEDDER 91500 I.,ES FZC712ENZ0 h.._~_ .,...... ~.., PATRICK JAMES VEDDER ; .V ~s sROAz~w.~Y, 10TH ~~oo~ BRIAN ROSS 7519Q CAMBRIDGE, n']A 021.42 u ti - rn.c Fxn,,~~.uois ~ d, nro,~ rra~na:. r=us Brian Ross u za.titi~.n""° iY_ a~" vso A . r ~~ E M+aE 6002A t-m-34d Form FRA F8180.80 (02-09) ~MPIpYER'S C '~~~ {~TRANStT • ~ I~ ***Privilegec! and ConfidentiaB*** °TOe Attorney Christine Baker Cc: S. Santoro, A. Herbotd, P. Wyckoff FROM: Todd Barretta DA~IE: April 26, 2017 Re: FRA 217 Audit —Preliminary Compliance Report Last week inspectors from the FRA's Region 1 office were on-site at the ROC and in the field to conduct a regulatory compliance review, under 49 C.F.R. § 217, of NJT's Program of Operational Tests and Inspections Recordkeeping (the "program"). NJT was noticed of this visit by and through a March 3, 2017 letter to Mr. Richard Green, Jr., Senior Director of Systems Operations. The FRA last reviewed our 217 program via an audit of the Rules Department in September 2014. In addition to attending the entrance and exit interviews with the FRA, the undersigned held pre- and post-audit meetings and debriefings with responsible personnel from F2aii Ops including Fred Uattison, Richard vreen, and Evan Zucarelli. NJT's program is not in full compliance with the regulatory requirements specified in part 217. Aithc~ug'r7 we r7ave nit yef received any ins~ectior7 repc~ri'ts ~r summary or findings firom the FK%~, we have been verbally advised that approximately fifteen (15) violations will be recommended for issuance against NJT. In addition, NJT must scrap its current program and must resubmit documentation of a new program to the FRA for approval. Most displeasing to the FRA was the recurrence of virtually all of the same violations and defects found during the 2014 audit. The Chief Compliance Officer (CCO) will assist and support the Rules Department as they work to revamp the program and the documentation for resubmission. The CCO will issue a formal and complete report following receipt of the official FRA findings and recommendations. The CCO is in process of preparing an estimate of the costs (new analytical support staff, replacement of antiquated systems, department-wide training) along with the necessary policy, process, and procedure changes required to bring the program into compliance. Based upon my understanding of the program and the regulatory requirements combined with my i nformal conversation with the FRA, NJT has a high degree of risk exposure and liability associated with continued program defects and violations of a section of the regulations that are held as particularly i mportant to the FRA. As such, requisite improvements to our program musf be assigned a high level of priority. ''"'~''~Advisory, Consultative or Deliberative''~xX Compliance Issues 'Cc~esc-l~y, Maarch 1~, 2Q1~7 :l?:L~ PM 1. Personnel Termination/Arrest - 03/10/2017 2. Document Tracking/e-Discovery//Version ID 3. FTA Asset Plan 4. FTA Drug &Alcohol Program Audit -Need Responses 5. FTA Drug Policy Statement Revision 6. Employee Absenteeism a. FMLA b. Storms 7. Scattered Processes - no central ownership 8. Need Better Collaboration Platform 9. Social Media Policy 10. Cleanliness/Enforcement at Stations 11. NJ Transit Regulations Expiration Deadlines 12. MV Driver's License Check -Employees 13. Consistent Application, Reporting &Disclosure 14. Need Annual Compliance Plan 15. Regulatory Restrictions &Waivers 16. Contract Change Orders 17. Co-mingling Grants, Ops, & CIP Funding 18. Approval Controls -Rubber Stamp 19. Financial Processes &Procedures 20. Legacy Systems -New Implementation 21, Succession Planning 22. Intermediate Contract Compliance -Between Proj Mgr and AG Office ~3 Rail Inc H~Ur~ of Sary r.,a - P~Iv R~ Pr~C - TRn-Q, 24. Overtime -See IA 15-006 25. Consistency 26. P CARD Internal Controls 27. Succession Planning 28. Mid Dept Records - HIPAA 29. FRA Inspection Reports -All Manual Forms 30. PTC Implementation 31. Document Retention 32. EPA -Wetlands Credits 33. FMLA -Audit Upcoming - IA Report Issued 34. Rail PTC -Timeline 35. FRA 217 Audit Findings / TRO / TQS 36. FRA Horn Sounding at Crossing 37, FTA Transit Asset Management Plan 38. State office of System Safety Oversight SMP Lists Page 1 Overview fues~iay, M~,rrch 'I.~, 2C)1'7 9:2~ nM On 03/10/17, CCO learned that a rail conductor, in a regulated safety position, had been pulled off from h is train/shift by the N1TPD and arrested and terminated? Apparently, fmr employee made derogatory comments about NJTPD and/or NJT on his social media facebook account. This drew attn from the NJTPD who investigated said fmr employee. Police Investigation revealed that employee, for years had lied to NJT in that, upon his hire, he provided the SSN and/or docs of his twin brother -not him. Further, NJTPD discovered that fmr emp. Has a list of convictions including poss weapons charges. From Compliance perspective, several things are at issue in both HR and PD. UPDATE -Spoke- with Penny -Story developed more -- no arrest and employee released after i nvestigatory detention revealed he was the person he proclaimed not his brother -- leaves open Police Procedure./ Regulation Compliance UPDATE 2 -Spoke to Chief (ironically) in re social media policy generation. I will investigate, and research and prepare draft. Still no westlaw access or information resources. UPDATE 3 - on 3/31 @ 1on1 meeting, CCO advised ED as to social media policy needs and my particular findings. ED instructed CCO not to pursue. Personnel Inquiry Page 1 From: Barretta, Todd C.(CEDOTCBI To: Debbie Prato (DPratoCalnitransit.com) Subject: New OSA Policy 3.34 Date: Monday, May 1, 2017 2:38:00 PM ~ ~• FYI, the new policy has a statutory reference to the Hours of Service Act as 45 U.S.C. 61-64b. That citation is not current as that law has been repealed and replaced by the current adopted Hours of Service Act which is located at 49 U.S.C. Chapter 211. The correct statutory reference is 49 U.S.C. §§ 21101-21109. There also appears to be a typo or character recognition error in the definition of OSA. The random characters, "iL~/z" appear after the word "sleep" Best Todd Todd C. Barretta, J.D., M.B.A. Chief Compliance Officer NJ Transit One Penn Piaza East Newark, NY 07105 1~?73! 49~.-7R~~ (off (201) 988-3358 (c) Tf3arr;ettaC~niTransit.~:c>rY~ t ~r~~►~~i~~r a» . ~, Attention: One or more violations have been cited on this report. llEPARTMENT OF TRANSPORTATION FEDERAL RAILROAD ADMINISTRATION (PRA) INSPECTION REPORT OMB Approval No.: 2130-0509 Date Inspector s Name Inspector's Signature Inspector's ID No. Report No. yy mm dd CRAW,SEAN 19210 12 2017 06 12 Railroad/Company Nsme &Address R/C Division RR/Co. Representative (Receipt Acknowledged) New Jersey Transit R Name Mr. Steven Santoro 1 Penn Plaza Eask RR/Co. Ticte Code Subdivision Executive Director NJTR SYSTEM Newark NJ 07105 Email [email protected] SignaNre From: Codes Destination City &County rrom Latitude Ciry NEWARK 2130 Codes From State j~J 34 C~Ty Longitude County ESSEX C013 County To Latitude Mile Post: From 7'o Inspection Point To Longitude Activity Code: USC Units: I Sub Units: 0 Item Initials/Milepost Equipment/Track # Type/Kind 49 CFR/ Defect Subrule Speed Class Train #/Site SNFR* RCL** # of Activity USC Oce.*** Code I USC 0201 57A2D N N 1 USC Description FAILURE TO IMPLEMENT A PTC SYSTEM IN ACCORDANCE WITH THE RAILROAD'S REVISED PTCIP. INCLUDING THE END-OF-2016 IMPLEMEN"I'ATION MILESTONES. Seal Applied Seal Removed Hazard Class UN/NA ID Latihide: Longih~de: Viola[ionReconunended yes ~No Railroad Action Code Written Notificaho~~ to mm/dd/ Comments on back'? ~Required ~~ Optional Date~ YYYY) '1 P.A of Reu~edial Action is: ~ Page 1 of 1 PORM FRAY 618096(Rcviscd 07/14) ° SNPR-Spuciul Nuiiue fur Rep~iis RAILROAD/COMPANY COPY "RCL-Ruwotu Cuutiul Lucuwulivu "+'ll of Oua-Nmnbni of Occmiuucns From: Barretta Todd C.(CEDOTCB~ 70: Snow Joseph E. {CDAGJES) Subjecta Re: FRA Violations - Ceii Phone use Date: Tuesday, May 9, 2017 5:42:03 PM Lol, I think we're on the same page with that. My reasoning, in part, of asking you if we indemnified was to ensure that we stopped asking for violations to be issued in the event that we were ultimately responsible. Even if not, I'm still not 100% sure if it makes sense to ask the FRA to violate our employee. That's definitely something I'd like to chat more with Bob Lavell about. Maybe we can do that together sometime? Thanks Todd On May 9, 2017, at 5:25 PM, Snow, Joseph E.(CDAGJES) Also, did i read the note correctly that NJ Transit asked the FRA to fine the two conductors who violated the cell phone use? Is that how it works, we ask and the FRA then assesses a fine? J oe From: Barretta, Todd C.(CEDOTCB) Sep#a ?uesday, May Q9, 2Q17 3:57 PM To: Snow, Joseph E. (CDAGJES) Subject: FW: FRA Violations -Cell Phone use M i Joe, f hope all is well. In the attached, for example, the FRA is recommending that enforcement action be talon for a violation of a re~ul~tion against an individual employee. I f the FRA's Office of Chief Counsel decides to take said enforcement action, to what extent, if any, is NJT obligated by law or agreement to indemnify our employee? Thanks Todd _ . From: Whitney, Kathleen J. (CROPKJWI) Sent: Monday, May 8, 2017 2:56 PM To: Barretta, Todd C.(CEDOTCB) ~czl~~ ~~f/~Gi2e~~ Special Assistant Office off' the 1!~/GIVI Rail Operations NJ TRANSIT 1!\ One Penn Piaza East —Third Floor Newark, NJ 07105 Office (973) 491-7755 Email kwhitney_(c~njtransit.com try T6~ANSIT ~.~ ~. TO: Mr. Steven Santoro, Executive Director FROM: Todd Barretta, Chief Compliance Officer DATE: March 24, 2017 SUBJECT: Status Report 2 VIA EMAIL AIVD INTEROFFICE MAIL Attached hereto please find an informal report summarizing my thoughts and experiences during this second and third week of employment with NJ Transit. It provides an overview of the meetings I have had with your staff, offers a status update on my currently tasked projects, and outlines my current and continued plans for strategic improvement. Very truly yours, Todd C. Barretta Enclosure (1) 1 Executive Report's Report —Progress, Plans, &Problems (PPP) For the two weeks ending 3/24/2017 To: Executive Director From; Chief Compliance Officer EXECUTIVE SUMMARY Today concludes the third week of employment as NJT's Chief Compliance Officer(CCO) and this is the CCO's second report of activity to the Executive Director (ED). The intervening two (2) weeks have been busy but engaging and rewarding. At this time, the CCO has had the opportunity to conduct aone-on-one discussion with each of the other Executives reporting to the ED except with the CIO (due to reschedules) which should be completed early next week. The CCO, for the most part, is on schedule to complete the 30 day tasks as outlined in the last report. In addition, CCO is becoming well acclimated with his new colleagues and has enjoyed receiving both breadth and depth of knowledge about NJT operations. CCO continues to develop a stra#egic plan for the rca!l~~t of the ~Qr~p(ian~~ department whi[~ constantly I~arnina about new issues and possible areas of compliance that require attention. CCO has been prioritizing the same. -- --- — ACTIVITIf OVEf~VIEVIi __ _ - - The preceding two weeks proceeded largely as intended. Introductory meetings with other executives and their staff has now nearly concluded and the CCO believes that in addition to learning about NJT's overall operations and functionality of each business line, the CCO has formulated a strong understanding of how the new compliance department will function and i nteract with each of the other departments. In that realm, CCO significantly reports that he anticipates no conflicts with other department or personnel. Moreover, the CCO and each of the leaders of the departments which perform seemingly related functions (internal audit, Atty General, Civil Rights, Safety) have come to a full agreement as to how each will partner and co- 2 function. It is expected that the compliance department will operate well with others as it gets ramped up and functionally integrated across the corporation's lines. CCO has begun to schedule more detailed meetings with some key secondary employees and follow-ups with certain executives according to the initial report and plan. While not necessarily a per se compliance function, the CCO, as a member of the ED's Executive team, had the opportunity to first-hand witness the full force of NJT's emergency planning and preparedness and the degree of camaraderie and dedication among and between NJT's senior leaders during a weather event which necessitated opening of NJT's EOC at the beginning of last week. For a new NJT senior leader, this experience was unique, impressive, and rewarding. Despite this, CCO, like other executives, was required to make certain scheduling adjustments and to cancel some planned meetings as a result of EOC and EOM meetings and conference calls; but was not unduly burdened and was subsequently able to meet with each of the transit operating line GMs that following week. Ths~ week, the G(~C) r~~~i~~d hip fiat rt~ti~e of an upcoming audit of its Drug and Alcohol Program by the FTA, one of NJT's largest primary regulators. The CCO was pleased to have been tasked by the ED with managing NJT's audit readiness. CCO has compiled a full project plan to assess and mitigate NJT's regulatory risk related to this audit. To begin this process, the CCO compiled notebooks of regulation information, best practices, and audit interview guides to share with the Medical staff. Upon review of that information and those checklists, the Med staff report no anticipated issues with the MRO, the collectors, or our processes and procedures employed by NJT in administering the program; the Med staff could not yet comment on the condition of the inspected medical records but will report back to CCO next week. It was however revealed in that process that NJT's policy on FTA regulated drug testing for safety sensitive employees had not been updated since 2004. 3 Moreover, a 2009 attempt to finalize a review and revision to the policy was not completed nor fully implemented. An initial review of the current policy, independently and in consultation with NJT's Med staff indicates that policy revisions are necessary in order to ensure NJT's full compliance with 49 C.F.R. 655. Ensuring that any requisite policy revisions are completed prior to the deadline for submission has been made a top priority. Amore thorough update and analysis of the FTA audit project is detailed below in a separate section. CCO also spent some not so insignificant amount of time beginning to assemble a specific document and knowledge library of relevant information necessary to well perform the compliance function for NJT. This preliminary information has been organized and incorporated i nto a Microsoft OneNote digital notebook project started during week one. One Note is related to MS SharePoint server Architecture that CCO ultimately plans to utilize as a communications i nterface, content management, and collaboration portal for the company wide exchange of compliance information. At present, CCO is also using this software tool to manage the FTA A~ad~t readir~sss project. GGQ had looked forward t~ attending a Manned te~hnol~gy steering committee meeting as CCO believes he can make many valuable contributions to that panel but said monthly meeting was canceled by the CIO. CONTACTS AND APPOINTMENTS 3/13/2017 Gardner Tabon 3/14/2017 EOC/EOM &Processing 3/15/2017 Mike Livarcik 3/16/2017 Mike Gonella; Deb Prato 3/17/2017 Penny Bassett; Warren Hersh 3/20/2017 Staff Meeting; Neal Fitzsimmons &Jim Schworn; CP-3 3/21/2017 Bob Lavell; Leotis Sanders; GAU Conf. Call 3/22/2017 Mike Kilcoyne; Ed Hoff;Deb Martelli &Patrice Verner 3/23/2017 Chris Baker; Policy 3.25A Exec Conference 3/24/2017 Staff Mtg; EOC CC; Eric Daleo, Megan Strickland, Pat O'Connor 0 NEXT TWO WEEKS As originally planned, CCO has follow-up appointments scheduled with specific strategic staff members that were suggested following CCO's executive one-on one meetings. CCO will also lead a number of scheduled meetings, conference calls, and site visits as part of CCO's FTA Audit readiness plan. CCO will continue to monitor and participate in executive level conferences and events. A tentative schedule is as follows: 3/27/2017 Staff Mtg; BIRC; FTA DAP Poly Review; Emery Ungrandy 3/28/2017 Mike Slack; Joe Snow; Jay Patel; Ron Nichols, Gerard Bochino; Lea Sheridan 3/29/2017 Lori Thompson ~ Sharon Young 3/30/2017 CS Comm; Admin Comm; Deb Prato 3/31/2017 Paul Kelly 4/3/2017 Deb Martelli; Staff Mtg; ED BIR 4/4/2017 Board Mtg; Kevin Amberg 4/5/2017 FRA Hours of Service Application Demo 4/6/2017 4/7/2017 FTA DAP Audit Conference Call AREAS OF CONCERN -REVISED CCO reiterates the previously reported areas of risk and noticed critical compliance issues such as undocumented processes, no standard and centralized storage and retrieval of i nformation and stitched silo departments that lack a complete functional coordination precluding the efficient exchange of information with other operating units. In addition, CCO respectfully reports the relatively urgent necessity to review and revise all company policies. It has come to the attention of the CCO that many of NJT's corporate policies have not been revised in more than a decade. CCO has discovered that several important processes and checks were indeed once performed but many have been dropped and lost with staffing changes -- along with budgets, staffing levels, and salary concerns, this seems to be a recurring theme complained about by nearly all departments. CCO strongly believes that the ability to craft and revise corporate policies is among the most important and effective tools available to the ED to reduce risk, increase compliance, drive productivity, and enhance morale and culture. CCO hopes to work closely with the ED and the executive team to craft and revise many more policies (for form, clari#y, and effect). Upon approval of the ED, CCO is pleased to help individual departments develop and document formal processes guided by those policies. CCO also learned of some potential issues with respect to NJT's Ethics Program. CCO believes it may be most prudent, as was once briefly addressed, to move NJT's ethics program into the compliance department. CCO will discuss these and other areas of concern in greater detail in person with the ED on April 14. 30 DAY GOALS —STATUS UPDATE Great strides were made toward completing CCO's initial 30 day goals. Already CCO has met with all of the executive team (minus IT) and has secondary conferences scheduled with many other employees. CCO has gained some limited access to some shared resources and systems but is still locked out of most information systems. CCO has begun assembling a library of relevant knowledge and information and grows his collection on a daily basis. CCO is comfortable with what he has learned about NJT's operations and looks forward to the continuous acquisition of new knowledge. CCO has begun to receive some reports and i nformation from some departments but some are more efficient at producing and more willing #o share than others. CCO respectfully reiterates the importance of having unfiltered access to each department, physical localities, and systems and applications in order to properly perform the compliance function. CURRENT PROJECTS - S~"ATUS UPDATE FTA Drug ~ Alcohol f~rogram Audit CD assigned CCO as the project manager for the upcoming FTA audit on May 8-12. CCO is using One Note to help manage the scheduling, assignments, and deliverables. As a preliminary matter, CCO reviewed the relevanfi regulations and the guidance and implementation materials published by the FTA. C;LU provided a copy of FTA's Best Practices Vuide and a compilation of Audit Interview Questions to NJT's Medical Dept. when CCO met with Deb Martelli and Patrice Verner on 3/22/2017. At that meeting CCO provided information resources to the Med Dept. and reviewed key interview question that will be asked by the auditors. Med staffed assured that collection and testing procedures follow regulatory protocols. CCO worked with Deb Martelli to assign a person responsible to gather each of the documents that we are requested to submit to the FTA by 4/10. During the course of the review, Med staff informed CCO that the Doctor, our vendors, and our collectors are knowledgeable but that we may have some exposure with respect to the records review and policy review. Deb and Patrice, next week, are to pull some of the records and perform aself-audit in line with the questions that will be asked by the auditor. Med staff indicated that they were nearly certain that our current policy was not in compliance with the current regulations as cutoff levels for drug detection have changed and additional direct observation standards have been set for suspect testing since the last revision. Med staff confided in CCO that the process of policy revision began sometime in 2013 bit that it had not b~er~ ~or~plet~~e ~~C~ is currently r~ui~~nring #h~ pc~li~v end will work with Deb Prato and her team to update and revise in the most efficient manner if and where necessary. Upon most recent information, Deb Prato will update CCO on Monday following her review of other information that she has recently obtained. CCO has meetings scheduled with each of NJT contract carrier managers to repeat the same education, review, and inspection process at the carrier's locations over the next week. At that first meeting, CCO will identify a person responsible for obtaining the documents required by each of the Contract Carriers. CCO will continue to manage the audit preparation and readiness and will update the ED as the project continues. Compliance E-Notebook CCO now uses ashare-point portal (same as that used by the NJT Board) to organize compliance information and issues. CCO has identified several issues of compliance and risk 7 and these are organized in this application. The notebook is also used for contact management, project management (although not CCO's first choice for PM) and for notes from all meetings and conferences. It is fully integrated with Outlook. This application was also used to organize the information and communications regarding the HBLR production request. If so desired, CCO is happy to share and demonstrate this technology to the ED. STRATEGIC PLAN DEVELOPMENT Although somewhat initial and well ahead of final delivery, CCO has begun the first draft of a Strategic Plan for Compliance. This detailed plan will provide a top down view and full roadmap to the entire compliance function at NJT. Upon completion of the first draft, according to or ahead of the initial planned delivery of 90+ days, CCO will present and review the details to the ED, the DED, and the Chief of Staff for acceptance, comment, and revision, and will then share the final draft with the AAG (who already requested a copy) and the full executive team to help integrate the entire compliance function within each department and business operating line according to the plan. At this early juncture, CCO is pleased to report that CCO has already formed a close relationship with internal audit and the AG's office. All stakeholders seem to be i n agreement as to how the compliance function will function at NJT. The strategic plan rehashes these understandings in detail and will be presented to the ED fQr formal approval upon completion. R0~4D BLOCKS & PROBLEi1lIS No major problems to report. CCO does desire better access to information and systems and that said systems were more current, less cumbersome, and better implemented. CCO respectfully notes lack of cohesion and constituency across departments. CCO has devised some several recommendations to improve efficiency and effectiveness, while eliminating d uplicative efforts in operations and CCO hopes to soon share the same with ED. From: Barretta. Todd C.(CEDOTCB) To; Steve Santoro (SSantoroCc~njtransit.com) Cce Paul Wyckoff (PWyckoffCcanjtransit.com~; Amy Herboid (AHerboldCo~nitransit.com~ Subject: Executive Session Item -Claim Settlement (Item 1705-16) -Alexander Son v. NJ Transit Date: Monday, May 15, 2017 3:21:00 PM For the reasons stated below, I disagree with the conclusion of the legal evaluation provided by Attorney Hart and with your approval and support, I would like an opportunity to argue against recommending settlement of the claim in the amount of $1,000,000 for board approval. 1. It is clear that the passenger's "gross intoxication" was at the very least a contributory (and possibly the sole cause) of the accident. 2. Our medical experts seem well prepared to address and rebut the opinions of P's experts on almost every point 3. It seems to be a near impossibility that the hood of his jacket would become caught in the bus doors (without being noticed by the operator nonetheless) and would be capable of causing him to be dragged and fall to the ground. In addition, the jacket is not even available for inspection or evidentiary admission as P, himself, intentionally caused the spoliation because it was "too painful to look at." Ridiculous. 4. The settlement valuation and risk analysis seem to be erroneous. Plugging the relatively a rbitrarily selected values into their damages formula results in a values between $1.825M a nd $2.920M NOT $2.5M to $4.0 M. 5. The economic analysis is fundamentally flawed. a. It assumes that P will actually require all of the services contemplated in the life plan but that plan, provided (and not rebutted) by P's expert, is inconsistent with that expert's own conclusion that P requires only "occasional, minimal assistance." b. The present value calculation is presumptively based upon USA eranomic and demographic data. Since it is believed that P is an illegal immigrant without legal status to work nor continue to reside in the USA, I think it is quite reasonable to argue that the economic analysis should utilize cost and demographic information from Guatemala, not the USA. There is ample support in the case law to ~~tili~e the economic information from an immigrant's home country when calculating lost wages; i can't see how the future medical expense calculation would differ. i. P's lifespan in Guatemala would not be 80 years, it is approximately 9 years less than that of an American citizen living in the USA i i. The cost of living in Guatemala is on average 50%+less than it is in the USA and the cost of medical care in Guatemala is up to 90%+less than it is in the USA he evaluation gives great (and undue) weight to the credibility of P's sole eyewitness based solely upon the fact that the witness is "disinterested and a marine corps veteran." i. Witness could not see both of P's hands i i. Witness is not entirely disinterested as P and the witness both reside in the same neighborhood and share a common ethnic decent i ii. The cre~iik~ilily ~f the witness is not infallible because he is a military vet. 1. This witness is not a doctor, lawyer, or police officer. In fact, his sole source of employment has been working as the manager of his family's liquor store located in their same neighborhood. 2. Significantly, the liquor store that he manages has recently (2016) l ost their final appeal to reinstate their liquor license. 3. It was revoked due to selling alcohol to minors and for being a hub of criminal activity including the trafficking and sales of narcotics for which this witness's family was criminally charged. i v. Police say that liquor store is "one of the worst trouble areas in the city for criminal activity." From 2012-1013, police received 136 calls to that store for shootings, assaults, and drug activity. Counsel seems intimidated by P's choice of counsel. Referring to him as well-prepared, experienced, and aggressive. In actuality, the counsel of record is not partner, David Mazie, but rather junior associate Adam Epstein who graduated from law school 6 years ago. think that in the greater scope, we sometimes prematurely settle claims and do so for more than they are worth —the practical effect to this is simply inviting more claims and litigation because we're seen as an easy target. This claimant, an illegal immigrant, was drunk, and at fault. It is outrageous to pay him a sum that equates to many multiples times his lifetime earning capacity for injuries that he has already largely recovered and medical treatment that he received with almost no out of pocket costs to him ($500 he owes to doctors only). Thanks Todd Todd C. Barretta, J.D., M.B.A. Chief Compliance Officer NJ Transit Headquarters One Penn Plaza East, 9th FI. Newark, NY 07105 (973)491-7821 (o) (201) 988-3358 (c) T[3~~rrett~~ n'tran5it.t;orn I~t~~-~~n~~lT _ ~n~ vu~y t~~ r~:~. ~` NJ TRANSIT INVITES YOUR I tei1"EREST IN THE POSITION OF ~--f I EF FI ~A~ DIAL BFI DER tl _ _ ~ . ~r~, ~.~: ~ ff ~ `~ v~'i s"~ ,- ~ 7 c .~,; ~~~~ _ '^a mss- ~' r ~-~~ {~ ~ ~d '-~'Y i ,1 U ' ~ ~. S t~ n~~ ~ 1a ~ ~,~i" s ~1 ~g f~' j I ~ v:,x ~ s n'L v it ~~ ~'.. A t h 1r ~~w ~ r' .... ~S 9 Y Q`T lr' ~v ;~M'+ui r. »',;. h~ ~'~ ~«^^~^ ~' w f - .~. ~~., ~ ~ ~~ ~ s ,~'~.'r,.a'.' ..races- n ~ ''~ J '~'^ '.~. : t' ~ -,- I ~ S -~, y .bG... ".i:t tIj -.~ ti,., ~ i'~sa!'~~. s, a. ~ ~~/ t ~ ~ ~~ 1 ~ te ~ t '~ ~i r ~ , r, .. e a r +~ ~ ~ ~r-. siti ~ ~..: d ~vY (~ry~ 3~ Y ~~. _ i~,,' $ \~~y ~ ~ ~.u'~, Fes` ..i{\.>..: 1t. `~2 ~ ~` 1 f ~~~~ ~,~T ~ } ~ ... .~:~ ~,j ~ L~I ~. ~~. ~~ ~~ ~zrrc ,: ~. - - .. __._.._ 1 ~ ,~~. • • ~~ia, ,,,ar ~,~• ~., ~ ABOUT lJ5 .,, ~: , a ~~~ ,~ ` , ,'~~~ -.` ;: Created by the Public Transportation Act of 1979, NJTRANSIT 0 was established to "acquire, operate and contract for transporta- tion service in the public interest" ..,~ -~- ~; ~ ~_ I n 1980, NJ TRANSIT purchased Transport of New Jersey,the State's largest private bus company at that time. Between the ~, rt x •, .. . years of 198 I -85,the services of several other bus companies ~ ~~ s j, ~, „~ were incorporated into NJTRANSIT Bus Operations, Inc. ',~ 4:,,. t ~ 1 On January I , 1983, a second subsidiary, NJTRANSIT Rail Opera- -., ~ v _ ~., ,w ~, tions, Inc. was launched to assume operations of commuter rail in '~ ~' ~' State after Congress ordered Consolidated Rail Corporation ~ .~, - s ''~ .. the (Conrail) to cease its passenger operations.A third subsidiary, NJTRANSIT Mercer, Inc., was established in 1984 when the agency assumed operation of bus service in theTrenton/Mercer County area. In 1992, following a full reorganization, all three subsidiaries were unifed and operations were significantly streamlined. 1 F _ _~ ~ •,..~ ~ N~ 7RAfv51T Our stakeholders, residents are represented by an eight member Board of Directors appointed by the Governor. Seven members are voting members;four members are from the general public ,. v"~~r f `~ ,s 4 ti~'~~ ~ ~,• = anti three are State or"ticiais. Vne non-voting member is recorn- mended by the labor organization representing the plurality of the employees.The agency is structured to encourage broad public ~ :~~ . ,, participation in the formation of transit policy for the State. ~;~3 ~ Governor can override - ~~ ~ ~ ~'~~ ~ ~I ~' a ~ a;~: a ,,, ~ NJTRANSIT's board meets monthly.The ~ ~,~ ~~(~~ 7.lF; ~'. board actions by vetoing the board meeting's minutes. ~ ~,, _ ~~ n ~:~ NJ TRANSIT Corporation's Board selects an Executive Director to ~~~ . administer the entire agency.The Executive Director serves as President of all three subsidiaries (NJ TRANSIT Bus Operations, NJTRANSIT Rail Operations, Inc, and NJTRANSIT Mercer, Inc.). TF-~ E IDEAL ~A~I D I DATE .~ ~.F_ ~~~ ~ ~~~ !' ~~, ~~ ~ ~ ~ ~ ~r ' r NJ TRANSIT is seeking a dynamic Chief Financial Officer and Treasurer. The ideal candidate possesses a bachelor's degree in Finance, Business Administration, Accounting `~' or Public Administration with 10 years of public sector experience in increasingly g $~@ responsible leadership roles as a direct report to the Chief Financial Officer for an agency managing a budget of at least $50 M ` or better. Must possess a current CPA. S/he will have experience in gathering and analyzing financial information and developing actionable, well-reasoned recommendations to the Executive Director and senior leadership. S/he must be a ~ ~ ~' ~, y; ~~ J systems thinker, and a proactive business ~`''" ~ T-"— ~- ~ -~' ~u .. partner in amulti-business-line agency. ,, ~-' ~ ~ - ~ ~ ;~ , ~ ~ ~ !~~ y~~ ~ ~ ~ ~ ~~~~ ~ The incoming CFO must be collaborative, ~' ~ ~ a. ~~ ~ ~~~ ~ ~ "'~ K '~~ , r ~~ ~~ creative and flexible in his/her management ~ ~ ~ ~ ~~~ ~~~3~ ~~` ~~ ~ ~ '~ ` z style with a commitmentto public service, ~ ~+~~~ ~~'~"~. ~ ~ _~ ~ __ _ '$ and c:uslorner-focused outcai7ies. We'r-e ~ ~ "'"` - looking for a CFO who can hit the ground ~ ~ ~ " ~ :: running to find new ways to increase funding _ ._ ""s° ~" ~ ~ ~-u ~ ~-' ~;x:,,' streams, decrease expenses and develop ~ r ~ new business processes, redefine organiza- fir': ~ ; i I t i`'~ ~` I .~ - `- _ ~ V ~- ~, ~~ tional structure, and improve technology to ~ ~ _ _ ' ~~' - - ~'~~..~,,.~~.,~.r.~~~.~^~~~<.~~;L.a„r~a.,~,.:E:s., ~z~aci~~.m ~~--~~+~~ `~~r drive revenue. _~ ~ ~' ~~~~ o -~ ~ ~ ~ e • • as i ~ ,_ , t z~. a~, y n .a :~~ t n~~~~ ~rt'Y ~H ' t~t ~~ 's y~y.{~ Y y ' %~ s .~,;~~' .y ~ v u ~1~ . ~ t ~ ~ k t ~k~ ~ P J f r~ ~ ,5 r,~ ~~ ~ ~ ~ ~' ; -; ds ~,` ~ f'a~~ 3 'i r ,_. a~ The salary for the Chief Financial Officer is 3 A ~.':4'2~§ ~ competitive dependent upon qualifications and ~~~ experience of the successful candidate. NJ TRANSIT `\ '~ offers a competitive total compensation package a C~ t . ~~a[4 ~~L which includes: t ~ l t T~~ ~ `,~ 'I`~ ti~ ~! • A generous health, dental and vision insurance ¢Ian • Retirement — 6%contribution ofsalary to your 401(a) • Up to 20 days of vacation (pro-rated first year based on hire), plus 9 Scheduled Holidays, 3 Floating Holidays and 10 Sick Days per year • Disability and Life Insurance • 401(k) Plan with employer match of SO%, up to a maximum of3 The State of NewJersey has a residency law, must be willing to relocate. u ~ - ._....~.. _~ ..~. .~ `~ ~. ~- ~~~ ~