CT Audit Finds Issues with Port Authority. GOP Lawmakers Ask, Do We ‘have more reforms to make?’
December 6, 2024
Hartford Courant
The Connecticut audit found internal control deficiencies, instances of noncompliance with laws, regulations, or policies, and a need for improvement in practices and procedures that warrant management’s attention.
That is according to the Connecticut Auditors of Public Accounts, in reference to the Connecticut Port Authority, a quasi-public agency, for the fiscal years ended in June 30, 2022 and 2023, records show.
Three Republican lawmakers, Sen. Heather Somers, Sen. Henri Martin, and Sen. Stephen Harding in a joint statement on the recent audit of the Connecticut Port Authority audit, said “Multiple internal control deficiencies. Lack of key documentation. Questions involving millions of taxpayers’ dollars.”
“And that’s just from this year’s audit findings,” the lawmakers said. How – and why – does this keep happening?”
“It was only a year ago when the auditors cited the Port Authority for allowing the construction management company that is overseeing the redevelopment of the State Pier in New London to recommend itself for several multimillion-dollar subcontracts for the public infrastructure project,” the lawmaker’s statement said. “The years go by, but the lack of transparency at the Connecticut Port Authority endures. Year after year, we as lawmakers work in a bipartisan fashion to craft and pass legislation to reform the authority, yet it seems we will always have more reforms to make.”
“The authority is entrusted with millions of taxpayers’ money. It is making crucial decisions which have long-term impact on our region and entire state. And the taxpayers keep getting hit with the mounting bills,” the lawmakers said.
A message seeking comment was left with the Port Authority staff.
The examination of the records of the Connecticut Port Authority, according to the audit, included a recommendation that was modified and repeated from the previous audit: “noncompliance with purchasing policies.”
Such proper purchasing procedures “dictate that the authority should maintain and consult contracted price lists and hourly rates before approving invoices. The authority should also review adequate supporting documentation detailing the services provided prior to approving an invoice, as required by it accounting policy and procedures manual, according to the audit.
The audit also noted that the procedures require “written quotes from at least three vendors for goods or services over $20,000, and public solicitations for those over $50,000.” Furthermore, the authority must solicit professional services at least once every three years, and the board must approve any agreement or contract of purchases over $50,000.
But the auditor’s review of 60 expenditures, totaling $2,765,111, identified:
- The authority overpaid $192 on an invoice due to the vendor applying the incorrect hourly service rate. We also noted the authority could not provide documentation to support the contracted hourly service rates for six invoices, totaling $16,810. Therefore, we could not determine if CPA paid the proper amount.
- It reimbursed a vendor $18,400 for subcontractor drilling services (within the budgeted contractual agreement) without reviewing or requiring proof of the vendor’s payment to the subcontractor.
- Two invoices, totaling $4,626, did not contain sufficient detail describing the provided services.
- The authority was unable to provide evidence of review and payment approvals for two invoices, totaling $6,325.
- The authority last solicited communications and marketing services in October 2018 and executed a month-to-month contract with its current vendor on October 1, 2018.
- The authority paid $19,880 and $29,965 to its current vendor in fiscal years 2022 and 2023, respectively, without obtaining quotes from other vendors.
- There was no evidence the authority received board approval for its marine general or excess marine liability insurance policies for calendar years 2022 and 2023 before executing them. The annual premiums for these policies ranged from $61,200 to $138,771. We noted that the policies were within the board approved budgeted amounts.
Also, according to the audit, there were “521 and 483 expenditure transactions, totaling $2,199,889 and $3,536,636, during the fiscal years 2022 and 2023,” and 30 transactions were selected from each fiscal year.
“The authority could not explain why it did not solicit the procurement, obtain board approval before executing insurance policies, or properly review invoices,” the audit said. “The current administration could not comment on some issues because the previous administration processed the transactions, or they were approved by the Office of Policy and Management.”
The auditors also noted the finding has been “previously reported, in part, in the last two audit reports covering the fiscal years 2018 through 2021” and they they recommend the Port Authority “strengthen internal controls to ensure compliance with established purchasing policies.”
The authority responded in the document, “We agree with this finding in part. The Connecticut Port Authority (the Authority) operated under a maximum contingent of 3.5 personnel during the audit term, which saw the onboarding of an intermittent Finance Director and part-time Fiscal Analyst for financial management. This staff acted within policies and procedures, even under those limiting circumstances. The Authority has since stabilized its team with the permanent employment of key positions, which include a Finance Director, Maritime Development. “
The authority further noted, per the audit:
- It is in the process of hiring a permanent executive director, and that it is “ imperative to note, that upon employment, this new team has reviewed all policies and procedures, and operates in accordance with the Authority’s policies and procedures.
- The seven invoices totaling $16,810 resulted from varying scheduling positions and rates, compared to the contracted schedule. The suppliers have been advised, and are required to fully adhere to the agreed upon rates. The overpayment of $192 was the result of an incorrect rate submitted by a vendor. This was detected by the Finance Director, and the credit of $192 has been returned by the vendor.
- The drilling services cost amounting to $18,400 was a subcontract with a supplier. This cost was within the budgeted contractual agreement. All reimbursable costs will be and currently are supported by the relevant documents.
- The two invoices amounting to $4,626 were invoices issued by month-to-month contracted suppliers for provision of supplementary services. Currently, quotations are requested, and purchase orders are prepared for supplementary services provided by month-to-month suppliers.
- The invoices that the Authority could not provide evidence of review, occurred during the Covid epidemic and remote processing. The approval and issuance of a check by the signing authority, at that time, served as evidence of review.
- The agreement for communications and marketing services was executed in 2018, and amended in 2019. Section 2.1 of the amended agreement indicates that it is a month-to month agreement, and has been operating as such, as advised by the Office of Policy and Management. Management of the Authority utilized the services of the provider for jobs which were within the scope of services. The Authority now requires quotations for supplementary services sourced by the vendor. The Authority has posted an RFP for Communications and Marketing Services.
- Information and budgetary impact of the Marine and General Liability insurance policies were presented to both the Finance Committee and Board of Directors for calendar years 2022 and 2023. Although a resolution was not presented, the Finance Committee and the Board were fully advised and concurred with the execution of the policies.”