CHICAGO (WBBM) — A review of executive compensation policies at Metra under the late Executive Director Phil Pagano found that top executives disregarded rules that applied to those outside the executive suite.

Newsradio 780’s Bob Roberts reports, Metra has responded in a letter that takes issue with much of what the Ernst & Young accounting staff found in its review, done at the request of the Regional Transportation Authority’s board.

LISTEN: Newsradio 780’s Bob Roberts Reports

The 53-page report, obtained by WBBM Wednesday under a Freedom of Information Act request to the RTA, found nothing illegal. But it notes a number of irregularities and exceptions to the rules that applied to most of the commuter rail agency’s employees.

Among the findings:

* Other than a 2004 competitive market analysis, pay increases for top Metra officials were not monitored by internal audit, outside advisers or a Metra board subcommittee.

* Top executives disregarded written policies for the use of Metra-issued credit cards. They purchased flight upgrades, airline club memberships, magazine subscriptions and professional memberships, and failed to attach required receipts for executive meals both locally and on the road.

* Pagano, his chief financial officer, his chief communications officer and his deputy executive directors all received exceptions to a rule which allows the carryover of, or payout for, unused vacation time only in “rare cases.” In a letter from Metra Acting Executive Director Bill Tupper, the agency continues to insist that it did not constitute a variance with policy.

* Three officials, including Metra’s audit director, received $25 monthly contributions to their 401(k) plans even though executives were supposed to be ineligible for the program, which rewards safety on the job.

* Although pool cars were regulated, there was no policy governing the use of company cars provided to three top administrators.

The report concludes that Pagano’s pay was high, even for the day-to-day head of a major metropolitan transit agency.

It calls for a complete review of current laws and Metra board ordinances relating to the authority provided to its executive director over pay and benefit programs. It recommends periodic comparisons to assure that top-tier executive pay is in line with other big-city transit agencies. It also urges that controls be created to assure that Metra-issued credit cards are not misused.

Tupper wrote in his letter, dated Oct. 14, that Ernst & Young failed to properly note changes that Metra’s board has ordered since Pagano’s death, and said that the report contains inaccuracies and misleading statements.

He also wrote that no current Metra executives have deferred compensation agreements, or the ability to borrow against them, which Pagano and former deputy G. Richard Tidwell had.

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