Sens. Harding, Somers, Martin Slam CT Port Authority for Continued Failures
December 12, 2024
Audit: CT Port Authority failed to seek bids, properly purchase supplies
The Connecticut Port Authority failed to seek bids for a marketing vendor and improperly purchased a variety of services and supplies, a new state audit found.
“The authority could not explain why it did not solicit the procurement, obtain board approval before executing insurance policies or properly review invoices,” auditors said.
In a lengthy response included with the audit, the port authority partly agreed with the criticism while pointing out the agency was understaffed during the audited period and has since hired more personnel. The authority provided an explanation for each purchase criticized by auditors.
“It’s 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 authority said.
The audit covered the fiscal years 2022 and 2023.
The authority, located in Old Saybrook, has long endured criticism over its operations and purchasing practices, including ethics violations by members of the staff and board and the redevelopment of the State Pier in New London into an offshore wind hub. The project’s initial budget of $93 million has grown to nearly $310 million.
The authority has been without an executive director since 2022 and recently faced widespread push back for allowing the construction manager for the State Pier to hire itself for subcontracting work.
Three state legislators quickly seized on the latest audit as evidence the authority is not improving despite numerous mandated reforms by the state legislature.
“How — and why — does this keep happening,” said a joint statement from Republican state Senators Heather Somers, Henri Martin and Stephen Harding, who is the Senate Republican Minority Leader.
“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 senators’ statement said.
“The years go by, but the lack of transparency at the Connecticut Port Authority endures,” the senators added. “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.”
In a press release, the authority noted it had received its third consecutive “clean audit” from an independent company hired to review its books.
“For a variety of reasons, the (authority) did not have full staffing for significant periods of time going back to 2020, and that undoubtedly hindered some processes,” said Paul Whitescarver, who was elected board chairman in August, after former Chair David Kooris stepped down following a five-year tenure but remains on the board.
The authority stressed all of those recommended improvements have been implemented now that the agency is operating with appropriate staffing.
“I want to assure our legislators and the taxpayers of Connecticut that the (authority) is operating in full compliance with policies and procedures as it continues its mission to support and enhance the state’s maritime economy,” added Whitescarver, a retired U.S. Navy Captain who also served as Commanding Officer of U.S. Naval Submarine Base New London.
The authority oversees three deep water ports, in Bridgeport, New Haven and New London, and various small and mid-size coastal and river harbors which contribute to the state’s economy, along with the State Pier. The authority’s mission is to develop and market the state’s ports and promote its maritime economy.
Not following purchasing rules
Auditors noted purchasing procedures dictate the authority 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, auditors said.
A review of 60 expenditures, totaling $2.8 million, found:
- The authority overpaid a vendor $192 because it applied the incorrect hourly service rate. Auditors also said the authority could not provide documentation to support the contracted hourly service rates for six invoices, totaling $16,810, and as a result it could not be determined if the authority paid the proper amount.
- The authority 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.
- “Additionally, 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,” auditors said. “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.”
Auditors noted noncompliance with purchasing and procurement policies increases the risk of improper purchases and incorrect payments.
“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,” auditors said.
The finding had been previously reported, in part, in two prior audits covering the fiscal years 2018 through 2021.
“The Connecticut Port Authority should strengthen internal controls to ensure compliance with established purchasing policies,” auditors concluded.
In its response, the port authority partly agreed with the criticism but pointed out the authority only had 3.5 personnel during the audit term, which saw the hiring 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 said. “The authority has since stabilized its team with the permanent employment of key positions, which include a Finance Director, Maritime Development Manager and Office Manager. The authority is also in the process of hiring a permanent executive director.”
Regarding the seven invoices totaling $16,810, the authority said 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.”
On other issues raised in the audit, the authority said the drilling contract was within budget; the two invoices amounting to $4,626 were issued by month-to-month contracted suppliers for provision of supplementary services and the invoices the authority auditors said had not been reviewed occurred during the Covid epidemic and a period of remote processing.
“The approval and issuance of a check by the signing authority, at that time, served as evidence of review,” the authority said.
Additionally, the authority said 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,” the authority said. “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.”