Audit Report On The Department City Planning’s Administration Of The 72nd Street Subway Fiduciary Account

AUDIT REPORT IN BRIEF

The audit determined whether the Department of City Planning (Department) accurately accounted for the revenues and expenses of the 72nd Street Subway fiduciary account and ensured that all funds wee used in accordance with the fiduciary agreement.

Fiduciary accounts are used to record financial resources held and administered in trust by the City of New York. The principal and income of these accounts is intended to benefit individuals, private organizations, or other non-City government entities. In accordance with §3.01 (a) of the Penn Yards Associates Restrictive Declaration (Declaration), the Department is responsible for administering a fiduciary account established to receive deposits from an applicant (i.e., developer) who is erecting apartment buildings at the Riverside South development situated on the Upper West Side of Manhattan. A fiduciary agreement and account were established in July 1998 in accordance with the Declaration. According to the Declaration and fiduciary agreement, account funds are to be used by the Metropolitan Transit Authority (MTA) for construction of a new subway station entrance on the north side of 72nd Street.

Audit Findings and Conclusions

The Department properly accounted for and deposited the $10 million it received from the developer of Riverside South into the fiduciary account and disbursed $8.4 million to the MTA in accordance with the fiduciary agreement. However, the remaining $1,633,570 million on account is still owed to the MTA.

Audit Recommendations

To address this issue, we recommend that the Department:

• Remit the remaining $1,633,570 in the fiduciary account to the MTA.

• Close the fiduciary account after the payment is made to the MTA.