The port audit |
The elections last month for the Port of Seattle commission positions seemed to center on to what degree you were a “reformer” or at least a boat-rocker. Too bad the state auditor’s report on the district didn’t come out a couple of months earlier; it might have clarified the need while voters were making up their minds. As it is, the new report (undertaken as part of the auditor’s new Initiative 900 authority) is plenty devastating. The waste and losses reach deep into the tens of millions – just for certain specific projects like the Third Runway – and possibly higher overall.
The overarching conclusions include:
• The Port lacks sufficient policies and procedures to safeguard public assets from misuse, abuse and fraud. In cases in which controls are in place, they are not always followed.
• The Port Commission has largely delegated decision-making responsibilities for construction projects to Port management and employees. In some cases,
vendors control projects and make decisions that should be made by the Port.
• Port executive management has withheld information from and sometimes has misinformed the Commission about the terms and progress of construction
projects.
These conditions are caused by: The Port Commission’s adoption of Resolution 3181, delegating some of its decision-making authority to Port administration, including some oversight of construction management. The former Chief Executive Officer’s broad interpretation of the resolution effectively distanced the Commission from information and oversight authority of capital projects. The audit found no record of the Commission reassessing or questioning whether it was meeting its responsibilities to oversee construction projects. These conditions leave the Port’s construction management vulnerable to fraud, waste and abuse. For example, Port management authorized a Third Runway contract that cost $32.7 million more than the Port engineer’s original estimate. The contract violated state law, and details of the arrangement were concealed from the Commission.
In addition, a consulting agreement awarded in 1998 increased without competition from $10 million to more than $120 million and is being used to augment Port staffing, unnecessarily costing taxpayers $60.5 million.
And goes on from there.
There’s been occasional talk about bad activity at the port, an undercurrent of “things ain’t right there.” Now there’s a report to put it in perspective.
Not much room for doubt any more: The suspicions are justified.
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