Presto vending devices on the TTC's new streetcars are often out of service because no one is regularly emptying coins from the machines.

That revelation was among several findings by Toronto's auditor general in a new report on Presto equipment and lost revenue on the TTC.

The report suggests that malfunctioning hardware, poor management and a lack of reliable data are causing the TTC to lose millions of dollars in unpaid fares.

"Due to issues, limitations, and a complicated system, the TTC may not be getting all the passenger revenue it should," according to the report, released Monday morning.

While Auditor General Beverly Romeo-Beehler did not provide an estimate of total lost revenue, she said the TTC's $3.4-million figure related to Presto problems "does not appear to be overstated."

Romeo-Beehler is recommending that the TTC and Metrolinx work together to identify when Presto machines are failing or frozen, and to develop a new system to detect errors

The report, and its 35 total recommendations, will be presented to the TTC board and Toronto city council's audit committee later this week.

Auditor General Beverly Romeo-Beehler says she can't provide an estimate of lost revenue because of information gaps and monitoring issues. (CBC News)

"[The numbers] are getting better, but they're not where they need to be. They need to be at very, very high level of reliability, both so that we don't lose money and so that our customers can depend on the system," said Mayor John Tory at a Friday news conference.

Coins not emptied for 7 days

In the case of the malfunctioning vending machines, the auditor general's office monitored the machines on new model streetcars in August.

Of the machines that stopped working during the month, 56 per cent of the cases were simply because the coin box had become full. That happened 188 times during August.

"From our audit work, it appears that neither TTC, Presto, nor its vendors are currently ensuring that the coin box is emptied on a regular basis for all Presto vending machines on new streetcars," the report says.

In one instance, auditors say it took seven days before a machine with a "coin box full" warning was emptied.

Further, a machine with a full coin box is not counted as out-of-service by the company that sold the machines and monitors their status because "it is not technically broken."

Auditors counted more than 300 Presto errors while monitoring a group of 100 bus drivers over two days. (Lauren Pelley/CBC)

Audit committee chair Stephen Holyday said the coin box issue illustrates a larger problem between the TTC and Metrolinx.

"There needs to be more co-operation and discussion between the two organizations to make sure these types of problems are solved properly," he told CBC Toronto.

Frozen machines and Indian holidays

The report also points to frozen card readers as an ongoing issue across the system. That error occurs when a reader appears to be in-service when it is not actually working.

To monitor frozen readers, auditors monitored 100 bus drivers, who drove a total of 168 buses over two days in June.

During the period, the drivers reported 330 Presto issues, 300 of which were identified as frozen machines.

Like a vending machine with a full coin box, a frozen reader may not be recognized as out-of-service by software monitoring the system, meaning that the TTC's reported Presto availability rate of 98.8 per cent may also be inflated.

Statistics on Presto availability are also inconsistently reported because the numbers are not updated on weekends and holidays.

Availability statistics were also previously unavailable during holidays in India, where an offshore team calculates and updates the daily numbers.

That has now been resolved, Romeo-Beehler said, though Presto staff were not aware of the issue when it was happening.

TTC seeking $7.5M

In a statement to CBC Toronto, spokesperson Stuart Green said the TTC has accepted all the recommendations in the report.

"Being heavily reliant on fares for our operations, the TTC is committed to continuous improvement and to making sure we protect that revenue source whether it be through enhanced fare evasion enforcement or by correcting technological issues that leave us short," Green wrote.

The TTC has filed a $7.5-million claim with Metrolinx over lost revenues, though Metrolinx has not paid the claim, citing a lack of supporting data from the TTC.

However, the report also found that "much of the data needed by the TTC has not been provided by Metrolinx."