OFFICE OF THE INSPECTOR GENERAL
C O M M O N W E A L T H O F M A S S A C H U S E T T S
J EFFREY S. S HAPIRO
INSPECTOR GENERAL
Internal Special Audit Unit:
2022 Annual Report
MARCH 15, 2023
ONE ASHBURTON PLACE, ROOM 1311
BOSTON, MA 02108 | (617) 727 - 9140 | WWW.MASS.GOV/IG
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 The Commonwealth of Massachusetts
Office of the Inspector General
JOHN W. McCORMACK
STATE OFFICE BUILDING
ONE ASHBURTON PLACE
ROOM 1311
BOSTON, MA 02108
JEFFREY S. SHAPIRO TEL: (617) 727-9140
INSPECTOR GENERAL WWW.MASS.GOV/IG
March 15, 2023
Via Electronic Mail
Secretary Gina Fiandaca Interim General Manager Jeffrey Gonneville
Massachusetts Department of Transportation Massachusetts Bay Transportation Authority
10 Park Plaza, Suite 4160 10 Park Plaza, Suite 3830
Boston, MA 02116 Boston, MA 02116
Gina.Fiandaca@dot.state.ma.us JGonneville@mbta.com
Administrator Jonathan Gulliver
Massachusetts Department of Transportation
Highway Division
10 Park Plaza, Suite 7410
Boston, MA 02116
Jonathan.Gulliver@dot.state.ma.us
Re: Office of the Inspector General, Internal Special Audit Unit:
2022 Annual Report
Dear Secretary Fiandaca, Administrator Gulliver and Interim General Manager Gonneville:
Pursuant to Section 9(e) of Chapter 6C of the Massachusetts General Laws, enclosed is the
2022 Annual Report of the Inspector General’s Internal Special Audit Unit (ISAU), issued today.
This report, entitled Office of the Inspector General, Internal Special Audit Unit: 2022
Annual Report, is the 10th annual report issued by the ISAU since its inception in 2013.
With its broad statutory authority, the ISAU performs impactful reviews and analyses of
public and private transportation funds. This work is designed to provide a level of oversight and
focused, continual improvement recommendations for the Secretary of Transportation; MassDOT
leadership, including the Highway Administrator; the General Manager of the MBTA; legislative
leaders; other interested stakeholders; and the public at large.
I am proud of this report and the Office of Inspector General’s ISAU team, which
completed these reviews and developed the report. This team is led by Emily Pedersen and includes
David Castelluccio, Jesmeen Khan, Colin Long, Ellen Lynch and Nicholas O’Neill.
Secretary Fiandaca, et al.
March 15, 2023
Page 2 of 2
Please do not hesitate to contact me if you have any questions about this report, the ISAU
or this Office. I hope that you, too, find this report to provide meaningful and important insight.
Sincerely,
Jeffrey S. Shapiro
Inspector General
Enclosure
cc (via email):
The Hon. Brendan P. Crighton, Chair, Joint Committee on Transportation
The Hon. William M. Straus, Chair, Joint Committee on Transportation
The Hon. Michael J. Rodrigues, Chair, Senate Committee on Ways and Means
The Hon. Aaron M. Michlewitz, Chair, House Committee on Ways and Means
The Hon. Marc R. Pacheco, Chair, Senate Post Audit and Oversight
The Hon. John J. Mahoney, Chair, House Post Audit and Oversight
The Hon. Bruce E. Tarr, Senate Minority Leader
The Hon. Bradley H. Jones, Jr., House Minority Leader
Monica G. Tibbits-Nutt, Undersecretary, Massachusetts Department of Transportation
Gregory T. Rooney, Acting Chief of Staff, Massachusetts Department of Transportation
Colleen Ogilvie, Registrar, Registry of Motor Vehicles
Jeffrey DeCarlo, Administrator, MassDOT Aeronautics Division
Meredith Slesinger, Administrator, MassDOT Rail and Transit Division
Jonathan Lenicheck, Chief of Staff, Massachusetts Bay Transportation Authority
Laura L. Schaub, Cataloger, State Library of Massachusetts
Michael D. Hurley, Senate Clerk
Steven T. James, House Clerk
 INSPECTOR GENERAL COUNCIL
Christopher Walsh, Chair (Governor’s appointee; term expires June 29, 2023)
Susan Terrey, Vice Chair (Secretary of Public Safety and Security’s designee: statutory appointment)
Attorney General Andrea Campbell (statutory appointment)
Auditor Diana DiZoglio (statutory appointment)
Comptroller William McNamara (statutory appointment)
Michael Caira (Governor’s appointee; term expires June 29, 2023)
Rachel Ciocci (Auditor’s appointee; term expires December 24, 2024)
James Morris (Attorney General’s appointee; term expires September 30, 2024)
OFFICE OF THE INSPECTOR GENERAL ’S LEADERSHIP
Jeffrey S. Shapiro, Inspector General
Natalie S. Monroe, First Assistant Inspector General
INTERNAL SPECIAL AUDIT UNIT
Emily Pedersen, Director (appointed by the Inspector General, term expires March 3, 2025)
David Castelluccio, Lead Investigator
Jesmeen Khan, Investigator
Colin Long, Coordinator/Investigator
Ellen Lynch, Investigator
Nicholas O'Neill, Associate Counsel
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 TABLE OF CONTENTS
Executive Summary....................................................................................................................................... 1
Background ................................................................................................................................................... 4
I. Office of the Inspector General .............................................................................................................. 4
II. Internal Special Audit Unit...................................................................................................................... 4
III. Massachusetts Department of Transportation ...................................................................................... 5
IV. Massachusetts Bay Transportation Authority ........................................................................................ 6
Audits, Investigations and Reviews............................................................................................................... 7
I. Massachusetts Bay Transportation Authority ........................................................................................ 7
II. Massachusetts Department of Transportation .................................................................................... 11
III. Other Reviews and Referrals ................................................................................................................ 13
IV. Investigations Referred to the Office of the Inspector General and Attorney General’s Office .......... 14
Other Activities ........................................................................................................................................... 15
Fraud Prevention Training .................................................................................................................... 15
Hotlines................................................................................................................................................. 15
Acknowledgment ........................................................................................................................................ 17
Appendix 1: MBTA Privatization Contracts ................................................................................................. 18
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 EXECUTIVE SUMMARY
The Legislature created the Internal Special Audit Unit (ISAU) in 2009 as part of the Office of the
Inspector General for the Commonwealth of Massachusetts (Office), an independent state agency with a
broad legislative mandate to prevent and detect fraud, waste and abuse in the expenditure of public
funds.
The ISAU’s specific task is to monitor the quality, efficiency and integrity of the Massachusetts
Department of Transportation (MassDOT) and the Massachusetts Bay Transportation Authority (MBTA).
Consistent with that directive, the ISAU audits, investigates and reviews how public and private
transportation funds are spent. In addition, Section 196 of Chapter 46 of the Acts of 2015 requires the
ISAU to evaluate the MBTA’s efforts to save public funds by privatizing some of its services.
Through all of its work, the ISAU assists not only MassDOT and the MBTA, but also serves the best
interests of the Commonwealth, cities and towns, and the public at large.
In calendar year 2022, the ISAU’s reviews led to MassDOT and the MBTA recovering $488,934
from two vendors, with MassDOT pursuing an additional $750,000 from a third vendor. This report
summarizes those recoveries and the ISAU’s other principal activities completed during the year.
MBTA Privatization. Between 2015 and 2018, the MBTA outsourced seven services pursuant to a
temporary exemption from the Taxpayer Protection Act (TPA).1 By statute, the Office must review all
MBTA contracts for privatized services and file a report within 90 days after the performance of the
contract is completed.2
In 2022, the ISAU issued reports on its reviews of two contracts for services the MBTA privatized:
absence management services and police dispatch services. In general, the reviews found that the MBTA
is a poor steward of public dollars and has weak approaches to procurements, contract development and
contract administration. The ISAU made several recommendations, including that the MBTA should
consider creating standalone contracts clearly spelling out terms such as costs and performance metrics.
Additionally, the MBTA would benefit from improving its contract administration protocols. At a
minimum, it should create contract administration plans that specify the individuals responsible for
tracking contract deliverables, performance and costs. Further, the individuals who approve invoices must
be familiar with the contract, especially the payment terms, and must validate all charges using
documentation and other data. Further, the MBTA must improve its business continuity and records
retention efforts.
1M.G.L. c. 7, §§ 52-55. The TPA, also known as the “Pacheco Law,” establishes a process that state agencies and certain
authorities, such as the MBTA, must follow before outsourcing certain services.
2 Section 196(c) of Chapter 46 of the Acts of 2015.
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 The ISAU continues to actively monitor the status and completion dates of the remaining five
privatization contracts to meet the Office’s reporting requirements.
Federal Pandemic Funding. In December 2021, the Legislature created an oversight reserve fund
for four state oversight agencies, including this Office, to review state and local agencies’ use of federal
pandemic funds. In addition to the Office creating a centralized Pandemic Funding Oversight Unit to
coordinate statewide reviews, each division within the Office has the responsibility to include pandemic
funds oversight within its regular work. The MBTA anticipates receiving approximately $2.19 billion in
federal assistance in response to the COVID-19 pandemic. In 2022, the ISAU continued to review the
MBTA’s use of those funds in accordance with the purposes described in the legislation creating the
oversight reserve fund. The ISAU found that the MBTA appropriately used grant funds to cover labor costs.
MassDOT Leases. MassDOT owns property throughout the Commonwealth and generates
revenue by leasing some properties to private companies. Over the last several years, the ISAU has
reviewed certain leases to evaluate whether MassDOT had collected all rents and other payments due
under the terms of the leases.
During its review, the ISAU identified a rail company, Pan Am Railways, that had leased a rail yard
in western Massachusetts but had not paid rent to MassDOT for four years and therefore owed MassDOT
approximately $266,000. Following the ISAU’s inquiry, MassDOT recovered the full amount the company
owed.
The ISAU also found that McDonald’s Corporation (McDonald’s) appeared to have outstanding
balances on four leases it had with MassDOT, including leases to operate service plazas on MassDOT
property. In 2022, MassDOT retained an outside auditor, which confirmed that McDonald’s had not paid
all rent it owed to MassDOT. The auditor also calculated the late fees and penalties that MassDOT could
recover under the lease agreement. These four leases had very detailed and specific calculations for late
rent payments, indicating a very deliberate process to ensure rent was paid on time without further notice
or incident.
In December 2022, the ISAU wrote a letter to MassDOT recommending that the department
exercise its rights under its leases with McDonald’s. Specifically, the ISAU recommended that MassDOT
recover over $750,000 in unpaid rents and fees, as well as the costs of performing the outside audit.
MassDOT’s recovery is pending as of the time this report was published.
MassDOT-certified DBE. Following a hotline tip, the ISAU reviewed whether a steel supplier,
Atlantic Bridge & Engineering, qualified for the state’s Disadvantaged Business Enterprise program (the
DBE program) that gives businesses owned and controlled by socially and economically disadvantaged
individuals a fair opportunity to compete for transportation contracts. The ISAU found that the company’s
prior successes as a construction subcontractor and supplier allowed its owner to “accumulate substantial
wealth,” meaning that the company no longer qualified to participate in the DBE program. Informing the
ISAU’s conclusion was its in-depth analysis of the business owner’s overall financial condition, which
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revealed their ownership of other businesses, a vast real estate portfolio, access to credit, and lavish
spending on both personal and business accounts.
The ISAU reported its findings to MassDOT for possible corrective action. MassDOT conducted an
independent review, agreed with the ISAU’s findings and moved to rescind the company’s DBE
certification. Following a hearing, MassDOT’s Unified Certification Program Board concluded that the
company no longer met the DBE eligibility standards and agreed with the ISAU’s findings and MassDOT’s
recommendation to decertify the company.
Anti-Fraud Training. In addition to the investigations, audits and reviews outlined above, in 2022
ISAU staff conducted training for highway field staff who oversee maintenance and construction projects.
The training addressed common fraud schemes, prevention techniques and red flags for vendor fraud.
Hotlines. The ISAU continues to operate two confidential hotlines, one for the public and a second
for MassDOT and MBTA employees. In 2022, the ISAU received and reviewed 303 complaints about
suspected fraud, waste or abuse in the expenditure of transportation funds, a 17.89% increase over 2021.
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 BACKGROUND
I. Office of the Inspector General
The Office of the Inspector General for the Commonwealth of Massachusetts (Office) is an
independent state agency charged with preventing and detecting fraud, waste and abuse in the use of
public funds and public property. The Legislature created the Office in 1980 at the recommendation of
the Special Commission on State and County Buildings, a legislative commission that spent two years
probing corruption in the construction of public buildings in Massachusetts. It was the first state-level
inspector general’s office in the country.
In keeping with its broad statutory mandate, among other responsibilities, the Office also reviews
programs and practices in state and local agencies to identify system-wide vulnerabilities and
opportunities for improvement; investigates allegations of fraud, waste and abuse at all levels of
government; and assists the public and private sectors to help prevent fraud, waste and abuse in
government spending. In addition, the Office provides guidance to public employees on issues that arise
under the Uniform Procurement Act, M.G.L. c. 30B, which governs the purchase and disposition of
supplies, services, equipment and real property by municipalities and other public entities. The Office also
educates public and private employees through its Massachusetts Certified Public Purchasing Official
(MCPPO) training program.
II. Internal Special Audit Unit
The Legislature created the Internal Special Audit Unit (ISAU) in 2009 to monitor the quality,
efficiency and integrity of the Massachusetts Department of Transportation’s (MassDOT or Department)
operating and capital programs. The ISAU’s oversight responsibilities also encompass the Massachusetts
Bay Transportation Authority (MBTA).
The ISAU investigates claims of waste or misuse of transportation funds and works to identify
potential cost savings. The Inspector General is statutorily required to appoint a director of the ISAU for a
fixed term of six years. Emily Pedersen, who was named to the position in 2019, heads u