Pennsylvania's elected fiscal watchdog says the turnpike commission lost about $109 million in interest rate swaps over 12 1/2 years, and says it needs greater accountability in how the four commissioners' expenses are reported.
Auditor General Jack Wagner, whose term expires next week, said Tuesday that governmental entities should not be using swaps, given the risk they carry and that fixed-rate borrowing is currently cheap.
"The Turnpike Commission should terminate its swap deals and ban all swap use in the future for the sake of Pennsylvania taxpayers and the motoring public as soon as it is financially feasible to do so," Wagner aid in a press release.
Turnpike officials say Wagner used incorrect methods to calculate the financial impact of the swaps.
“The topic areas of the audit findings and recommendations…suggest that the Turnpike is a well-run operation given our areas of responsibility, breadth of geographic coverage and age of the system,” Turnpike Commission Acting CEO Craig Shuey stated in a press release. “While we disagree necessarily upon the weight of each of your recommendations, it is clear to me that when system safety and provision of services are considered, the Pennsylvania Turnpike Commission is performing as should be expected.”
Wagner also criticized the commissioners for expenses that included hotel stays that sometimes exceeded $300 a night and an overall “lack of transparency” in accounting for the costs.
Wagner says the turnpike also should install fire detection systems in all of its tunnels and more rigorous procedures to follow up on tunnel inspections.