Given the precarious state of its finances - not to mention its railroad bridges and other infrastructure - it hardly seems wise for the MBTA to be placing bets on the direction in which interest rates might move.

Yet a report issued by State Auditor Joe DeNucci this week reveals that the MBTA participated in a dozen interest rate "swaps" between 2000 and 2005 that were intended to lower its borrowing costs - but instead ended up costing it more than $55 million. Not a good move on the part of an entity that, according to a release from DeNucci's office, "carries the highest level of debt of any transit agency in the nation," offers its workers the most generous benefits, and still can't pay its bills despite regular fare hikes and a claim to a fifth of all the revenue raised by the state sales tax.

During the five-year period reviewed by DeNucci's office, according to the release, "the MBTA entered into 12 interest swap agreements with various investment banks totaling $1.632 billion." There were some savings - $31.5 million worth - but some of these deals also generated higher interest costs and termination fees, all of which totaled $86.8 million.

Do the math and this effort to provide the T with a hedge against rising interest rates actually ended up costing it millions.

"It appears the MBTA was willing to accept short-term cash for long-term debt," DeNucci noted, "then paid millions of dollars in termination fees when the interest rates changed and became unfavorable to the authority." Worse, since the T couldn't afford to pay those termination fees from its operating funds, it had to borrow the money - $48.8 million worth - saddling itself with an additional $27 million in interest costs.

"These rate swaps were highly speculative, risky and complex and have proved costly to the riders who are paying increased fares and the taxpayers who subsidize the MBTA," DeNucci noted.

The T should concentrate on getting the trains to run on time and quit dabbling in the world of high finance.