Tuesday, February 28, 2012

Audits Find Violations at Seattle, Ilwaco Ports

The ports of Seattle and Ilwaco were both dinged for state law violations found under reviews recently made public by the Washington state auditor’s office.

The office of auditor Brian Sonntag revealed last week that it found three major violations at the Port of Seattle: the unauthorized providing of over $13 million to a school district for construction and operation of a high school; unauthorized usage of port credit cards by harbor commissioners; and unauthorized use of port labor.

Regarding the money to the school district, the auditor’s office found that $13.6 million given by the port for the construction of Aviation High School in the Highline School District had been actually earmarked for noise mitigation projects at other schools, and technically should have not been used to help build the prep school, which is scheduled to open in 2013.

The issue of misuse of credit cards by port commissioners had already been explored over the past two years by local media outlets, but the official state finding was that the five commissioners engaged in a total of 52 transactions totaling $2,990 between Jan. 1, 2010 and Aug. 31, 2011 that were not related to port business.

This was out of a total of $74,816 in total charges.

The unauthorized expenses included “personal meals, other personal charges, and expenses to extend port- sponsored trips or to modify the itinerary to accommodate non-port activities,” according to the audit report.

The port was later reimbursed for all charges.

Auditors also found that the port broke Washington state law requiring it to determine whether any construction project exceeding $40,000 can be accomplished less expensively by contracting out rather than using day labor.

For five projects, the auditor’s report states, the port was unable to provide documentation showing that it did this evaluation.

“While the port is not required to contract the work out even if it is more expensive to perform the work in-house,” the report states, “it should maintain documentation on why it awarded projects to port labor crews.”

The concern of the auditor’s office was that without evaluating whether it is less costly to contract the work out than performing the work in-house, the port’s at risk of over-paying for public works projects. The office also recommended that the port establish operating policies and procedures to ensure that it complies with state law regarding the use of port labor on public works projects.

A separate report found the Port of Ilwaco “did not follow state bid laws, limiting competition and not ensuring it received the best possible price.”

Of the two public works plans examined by the state, a parking lot project and construction of a boat yard, neither was awarded through state bid laws. As it turns out, however, both projects were completed for significantly less than the budgeted amounts.

The Ilwaco audit covered the period of Jan. 1, 2008 to Dec. 31, 2010.