The audit by the state Comptroller found that the authority paid its employees $30 million in unjustified bonuses and squandered millions more on health insurance while tolls increased.
In all, the audit found $43 million in wasteful spending in 2008 and 2009.
Comptroller Matt Boxer said the excesses happened as tolls increased on the Turnpike and Garden State Parkway in 2008. They're slated to rise again in 2012.
"Public-sector compensation should strike the appropriate balance between fairly compensating employees while ensuring that services are provided at the most economical cost," Boxer said.
"We question if the authority's bonuses and payouts are in the best interest of the public."
The audit shows toll- and taxpayers picked up the tab for such perks as free E-ZPass transponders, scholarships for workers' kids and an employee bowling league. The audit showed some Turnpike Authority employees got overtime plus bonuses for working holidays and their birthdays. Some were paid bonuses on top of overtime for removing snow, a routine job function.
Boxer recommended that the authority end the practice of giving non-merit-based bonuses. That would mean some employees would no longer get a longevity bonus of up to $600 for each year of service when they resign or retire. They also would forfeit bonuses of $25 to $100 for working holidays and up to $1,700 per season to plow snow.
Though longevity bonuses are being phased out, 1,400 employees still received them at a cost of nearly $12 million in 2008 and 2009.
Bonuses can balloon payouts at retirement. For example, a property inspector who retired in 2008 with a base salary of $73,469 walked away with $321,985 extra after payouts for sick leave ($143,806), vacation leave ($87,380), voluntary separation ($53,497), separation bonus ($24,600), unused vacation ($7,559) and longevity ($5,143) were calculated.
The agency's 2,700 full- and part-time workers are represented by 10 bargaining units, each of whom has negotiated a different contract. Not all employees are members of unions, though the audit showed management executives "piggybacked" off collective bargaining agreements and had similar bonus deals.
All the collective bargaining agreements expire next year.
The audit found that the agency overspent by not shopping around for employee health insurance. Boxer's report shows the authority could have saved $4 million this year alone had it enrolled in the state's health insurance program rather than a self-funded plan.
The Turnpike Authority did not return a telephone message seeking comment. However, in its official response to the audit, the authority said bonus payments were made according to negotiated contracts. It said there is no evidence that executive management negotiators didn't try to broker the best deal for the authority despite their own employment deals.
The authority said the auditor's recommendations would be considered.
It also said it effectively administered its health benefits program during the audit period and said it could not concur with the cost savings the audit claimed would have resulted from being in the state's insurance plan.