Special Board Meeting
February 25, 2011
No Widespread Corruption
“I am pleased to report to the Metra
Board and to the citizens of Illinois that
we found no evidence of widespread or
institutionalized fraud, waste or abuse in
the Metra organization.”
Hillard Heintze, 2011
2
Board of Directors
Timeline
3
Board Takes Swift Action
• Financial Practices & Reporting Review
Committee
• Executive Committee
• May 2010
• Engaged Hillard Heintze
• Interim Office of Inspector General (OIG)
• Blackman Kallick
• Risk Assessment
• Internal Controls Evaluation
4
Board Takes Swift Action
• Ordinance NO. MET 10-4
•
Metra OIG
• Ordinance NO. MET 10-07
•
Established Executive Committee
• Ordinance NO. MET 10-14
•
Non-Contract Employee Handbook
Employment Conditions
• Ordinance NO. MET 10-15
•
5
Special Contributions to 401(k) Plan
Board Takes Swift Action
• Ordinance NO. MET 10-16
•
Nepotism
• Ordinance NO. MET 10-17
•
6
Whistle-blower
Action Plan
7
Ethics
“I understand that it is my job to
expand upon this and to inspire and
empower Metra’s employees to come
into alignment with this critically
important mission. I will push these
reforms and others down through the
organization. Most importantly, senior
management must lead by example.”
February 4, 2011
8
Ethics
• Lead by Example
• Reinforce duties of Ethics Compliance
Officer compliant with new state statute
• Develop ethics training programs
• Teach ethics and integrity
• Structure office and interactions
9
Ethics
• Zero tolerance for fraud and abuse
• When updated, post Organizational
Chart throughout the agency, the
website and include in annual Metra
Program & Budget document
• Metra employees will be reminded of
Ethics Ordinance
10
It’s a New Day
• Passenger Safety & Satisfaction
• Fiscal Responsibility
• Reform
11
Blackman Kallick/Hillard Heintze
• Consolidated Findings
12
•
•
•
•
•
•
•
•
•
Organizational
Process, Hiring & Promotions
Information Technology
Compensation & Benefit
Discipline
Leadership
Metra Police
Strategic Planning
Ethics
Organizational Issues
• Human Relations & Administration
•
•
13
Understanding of management team
Management self-assessment of senior
staff within 30 days
Organizational Issues
• Non-Contract Compensation Considerations
• Return to Board Compensation Committee in April
with 2011 pay-increase recommendations
• Fiscal 2012 Initiate Pay for Performance
•
•
•
•
•
14
Subject to availability of funds
Notify non-contract employees of process
Mid-year 2011 reviews
Year-end and start-of-year reviews
HR to develop Pay for Performance alternatives and
present to Board Compensation Committee
Organizational Issues
• Compensation Considerations
• Human Resources Support - RFP
• Comprehensive non-contract
classification and compensation study
• Job specifications and salary ranges
as compared to peer agencies and
other transit properties
• Compression and hierarchy
15
• Present findings to Board Compensation
Committee
Organizational Issues
• Employee Non-Contract Handbook
Committee
• Review peer agencies and other transit
properties’ policies
• Update and add to Metra policies, including:
•
•
•
•
16
Acting appointments
Take-home cars
Leniency reinstatements
Compensation
• Report back to Board Compensation
Committee
Organizational Issues
• Revamp Five-Phase Succession Plan
• Analyze Workforce (Contract & NonContract)
• Successor Candidate Identification
• Compensation
• Recruitment/Retention
• Develop internal talent
• Add new approaches
• Mentoring and functional rotations
• Monitor, Evaluate & Revise
17
Organizational Issues
• Internal Audit
• With the assistance of Blackman Kallick,
develop annual enterprise risk assessment,
internal audit and controls strategy
• Assist ED/CEO in other various audits and
risk assessments
18
Process, Hiring & Promotions
• Competitive process in place for all
positions
• Any direct appointments require
concurrence of ED/CEO and Board of
Directors
• Hiring and promotion policies will be
strictly followed
19
Process, Hiring & Promotions
• All applicants will be referred to HR
• Effective immediately:
• The practice of “exploratory interviews” is
terminated.
20
Process, Hiring & Promotions
• Agency Wide
• All non-contract salary and equity increases will
only occur if they are part of a Board-approved
pay increase, a promotional opportunity or the
result of a Board-approved salary equity
review.
• ED/CEO in conjunction with the CFO will create
a well defined budget process for the 2012
budget year and an expanded monthly
variance process with root cause analysis.
21
Process, Hiring & Promotions
• All timekeeping manual entries will be
reviewed by managers
• Finance and Operations will engage an
analysis of the high-overtime groups to
determine the appropriate cost-benefit of
hiring additional employees versus
paying overtime.
• Managers and supervisors tasked with
reviewing all overtime reports
22
Information Technology Issues
“During our evaluation of the current
processes, we identified inefficiencies
that were directly related to outdated or
absent information technology systems
and applications.”
Blackman Kallick, 2011
23
Information Technology Issues
• Numerous systems 25 to 30+ years old
• Many key systems still operate on
mainframe
• Over-reliant on paper-routing processes
24
Information Technology Issues
• Some do not have disaster recovery
• High Priority
• Update Needed in Financial Suites
• Payroll
• Accounts Receivable
• Purchase Order
• Accounts Payable
• General Ledger
• Disaster recovery
25
Information Technology Issues
“…Also, this project will provide
funding for Metra to scope and
prepare an RFP for replacement of its
current financial systems with an
adaptable modular system that can
later be integrated into an Enterprise
Resource Planning (ERP) system that
will comply with current financial
system ‘Best Practices’.”
– 2011 Metra Program & Budget Book
26
Information Technology Issues
• Kronos
• Biometrics installed in remaining
engineering large facilities by March 31
• Evaluate timekeeping approach for 547 W.
Jackson Blvd., police and smaller
engineering facilities
27
Compensation & Benefits Issues
• Work with HR and Blackman Kallick to
provide comprehensive series of
recommendations relative to health,
pension and cost-avoidance
28
Compensation & Benefits Issues
• In the FY 2012 budget, enhance health
and wellness programs
• Recommendations to be presented to
Board Compensation Committee
29
Compensation & Benefits Issues
• Extend Blackman Kallick for Phase III
assistance to accomplish the following:
• Develop comprehensive annual enterprise
risk assessment, internal audit and controls
strategy
• Develop comprehensive series of
recommendations relative to health, pension
and cost-avoidance
• Complete risk assessment for remainder of
organization
30
Discipline
“Our investigation confirmed that, in
multiple instances, the absence of
common policies and protocols for
employee conduct and disciplinary
actions led to confusion among
employees about what consequences
would result from specific behaviors.”
Hillard Heintze, 2011
31
Discipline
• Develop program to train all managers
and supervisors on proper progressive
discipline
• Ensure consistency in practice
32
Discipline
• Action Taken February 17
• Effective immediately, all proposed leniency
reinstatements must be reviewed and
approved by the CEO.
• This change will remain in effect until
further notice.
33
Current Management Flow Chart
Board of Directors
Executive
Director/CEO
Audit
Chief of Staff,
Admin.
Dept. ED/Ops
Exec. Sec’y
Finance
Corp. Admin/
Website Comm.
HR
Capital/Planning
Media Relations/
Website
General Counsel
Customer Affairs
Legislative
General Admin.
Labor Relations
34
34
Current Management Flow Chart
Board of Directors
Executive
Director/CEO
Dept. ED/Ops
Finance
Vacant
Corp. Admin/
Website Comm.
HR
Audit
Chief of Staff,
Admin.
Vacant
Exec. Sec’y
Vacant
Capital/Planning
Vacant
Media Relations/
Website
General Counsel
Vacant
Customer Affairs
Legislative
Vacant
General Admin.
Labor Relations
35
Vacant
35
Leadership
• Chief of Staff
• Interviewing end of February
• In place by mid-to-end-of March
• Chief Financial Officer
• Board concurrence to hire search firm
• In place by late June or early July
36
Leadership
• Capital & Strategic Planning
• To be posted by end of March
• In place by mid-April
• General Counsel
• Posted until filled
• In place by end of April or early May
37
Leadership
• Legislative Affairs
• Posted
• In place by end of March or mid-April
• Labor Relations
• To be posted by end of March
• In place by end of May
38
Metra Police
• Metra Police Department
• Beginning March 1
• ED/CEO to review overtime reports for
police department on monthly basis
• Review existing policies on backfilling shortand long-term vacancies with overtime
39
Metra Police
• Return to Board with recommendation
for a comprehensive review of Metra
Police Department organizational
structure, responsibilities and external
security contracts
40
Strategic Planning
• Metra Non-Police Vehicle Fleet
• Evaluate vehicle fleet and usage
• Review all existing take-home vehicles and
uses
• Review why vehicles are unmarked
• Create policy for vehicles
• Define uses for justification
• Establish guidelines
41
Strategic Planning
• Strategic/Capital Plan Review & Update
• Strategic Plan Committee will update
existing long-range planning documents
• Assess needs across the six-county region
• Review current project scoring systems
• Assign updated values to projects
• Identify high-priority projects (safety, state of
good repair, obsolescence, etc.)
• Identify funding strategies
• Present to Board
42
Strategic Planning
• Update Mission Statement, Goals,
Objectives & Core Values
• Team-Building Process
• Board of Directors with executive
leadership
• Facilitated event
• Statement in place by end of third quarter
• Educate workforce on mission statement,
goals, objectives and core values
43
Effective Immediately
• All proposed leniency reinstatements must be
reviewed and approved by the CEO
• This change will remain in effect until further
notice
• The practice of “exploratory interviews” is
terminated
• All timekeeping manual entries will be
regularly reviewed by managers
• Managers and supervisors tasked with
reviewing all overtime reports
44
Effective Immediately
• Review peer agencies and other transit
properties’ policies and update Metra policies
• Initiate management self-assessment of
senior staff
• Begin development of an RFP for support
services for a comprehensive non-contract
classification and compensation study
• Reach out to employees for suggestions on
cost savings and efficiencies.
• Any direct appointments require concurrence
of ED/CEO and Board of Directors
45