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New York City Comptroller William C. Thompson, Jr. today issued an audit finding that the Taxi and Limousine Commission (TLC) failed to detect a possible misuse of a power of attorney privilege that lead to the continuing operation of a taxicab six years past the death of a medallion owner

“I’m extremely concerned that the TLC did not uncover this error for so long,” Thompson said. “Since the owner’s death in 2000, TLC processed five renewals for the medallion, and two vehicles were approved for operation by that owner. The transactions conducted on behalf of the owner after his death are highly questionable.”

Thompson’s audit – which can be viewed at www.comptroller.nyc.gov – otherwise found that TLC has generally maintained adequate controls over the issuance, renewal, replacement, and transfer of existing taxi medallions.

The TLC was created in 1971 by Local Law 12 to regulate and improve taxi and livery services in New York City. TLC licenses and regulates medallion minicabs, for-hire vehicles (such as community-based liveries and black cars), commuter vans, paratransit vehicles, and certain luxury limousines.

Medallions are aluminum plates affixed to the hoods of taxicabs to represent physical evidence of a taxicab license. Chapter 5 of the New York City Administrative Code, Transportation of Passengers For Hire By Motor Vehicles, requires TLC approval of transfers of medallions, and maintains the appropriate proportion of owners of one taxicab to owners of multiple taxicabs.

TLC classifies a medallion as either “independent” or “mini-fleet.” During Fiscal Year 2007, the average price for an independent and mini-fleet medallion was $411,083 and $518,875, respectively. TLC licensed 13,085 yellow taxicabs during that period – 5,506 independent and 7,579 mini-fleet.

Thompson’s audit found that TLC generally maintains adequate controls over its cash renewal fees, and the receipt and storage of medallions. TLC also ensures that waver letters are obtained from the Department of Finance (DOF) prior to the transfer of a medallion below fair market value.

However, the audit noted that TLC should improve its controls over the issuance of temporary and replacement medallions by segregating duties that mutually pose potential of risk or error, using prenumbered temporary medallions, and improving its monitoring of activities. The audit also recommended that TLC should segregate employee responsibilities over the transfer of medallions.

“Furthermore, TLC should require that medallion owners to satisfy outstanding summonses as part of their renewal process,” Thompson said. “Doing so would have resulted in nearly $80,000 in summons payments during Fiscal Years 2006 and 2007.”

Thompson made ten recommendations as a result of the audit, including that TLC should:

• Separate the responsibilities for authorizing, processing, recording and safeguarding temporary and replacement medallions.
  
  
• Order prenumbered temporary medallions.
  
  
• Separate the responsibilities for authorizing, processing, and recording of transfers, as well as the determination of t he fair market value for medallions.
  
  
• Amend its rules to require medallion owners to resolve summonses before medallions are renewed.
  
  
• Prepare standard operating procedures for Licensing personnel to ensure medallions with outstanding summonses are not renewed.
  
  
• Require medallion owners to periodically update power of attorney agreements with agents or personally sign renewal cards.

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