The Connecticut Port Authority spent thousands of dollars on expensive meals and liquor, incurred excessive legal fees and generally acted without clear policies governing purchases, personnel matters and ethics, the state auditors reported Thursday.
Many of the corrective actions recommended by Auditors John Geragosian and Robert Kane mirror those already initiated in July through Gov. Ned Lamont’s overhaul of the embattled quasi-public agency.
“Snack and beverage expenses appear to be excessive, considering the number of CPA employees,” Geragosian and Kane wrote.
The auditors also said “The lack of formal and complete written procedures increases the risk that CPA may not perform certain functions, or perform them inefficiently or inaccurately.”
The auditors, who reviewed authority records for the 2018 and 2019 fiscal years, studied about 140 travel, meal and entertainment expense transactions.
They found the authority could not document 36 transactions totaling $5,754.
Another $10,000 in receipts included varying degrees of detail, but did not establish any clear business purpose, Geragosian and Kane wrote.
They added that $1,910 of that spending included alcohol “which appeared to be expensive.”
The authority spent $541 on two hotel stays in Mystic, which is in the state’s southeastern corner. But one of those stays reportedly was to accommodate a meeting in Darien, which is 90 miles away in Fairfield County. The other was to accommodate an Army Corps of Engineering hearing in New Haven.
During these hotel visits, the authority paid for $571 in restaurant charges. The receipts were not itemized and “the authority’s documentation did not identify the people served,” the auditors wrote.
“Without proper documentation, we were unable to determine whether many of the CPA meal, hotel, and entertainment expenses tested were reasonable and necessary,” Geragosian and Kane added.
The auditors complained repeatedly about a lack of management oversight, saying the authority’s board and executive director had failed to establish policies to govern various operations.
Lamont, who took office in January and ordered an overhaul in July of the authority he inherited, had reached similar conclusions about the lack of policies and internal controls.
The governor called last summer for the resignation of then-authority Chairwoman Bonnie Reemsnyder amid media reports that the authority had paid $3,250 to Reemsnyder’s daughter for for six professional photographs hung in the CPA’s Old Saybrook office.
“The purchase seemed inappropriate and appeared to be a conflict,” the auditors wrote. “There was no compelling reason to purchase the pictures from the relative of a board member.”
Lamont named David Kooris, deputy commissioner of the Department of Economic and Community Development, to replace Reemsnyder as acting chairman.
The governor also has directed staff from the state Office of Policy an Management and with Connecticut Innovations — the state’s quasi-public economic development arm — to assist with policy development at the port authority.
“The findings highlighted in this audit are consistent with the discoveries our administration made earlier this year, and our decision to overhaul the leadership of this quasi-public agency and install severely needed new policies and procedures,” the governor said Thursday. “For too long, this organization operated without the highest standards of transparency and fiscal best practices that our state’s residents should expect and how state government entities should operate.”
The governor added that “What was happening at the Port Authority under the prior management was inexcusable and below what we should expect from an entity such as this. My office has worked and will continue to work to ensure the Port Authority is accountable and that measures are in place to make that happen.”
Kooris told the CT Mirror on Thursday that he expects all policies — covering purchasing, personnel matters, ethics and other operational matters — to be completed, adopted and implemented within the first three months of 2020.
The auditors also found the authority’s personnel manual — that was in use during the past two fiscal years — was “incomplete, inconsistent, and does not reflect the authority’s actual practices.”
For example, the authority paid a terminated office manager for all accrued vacation time even though the manual states “paid time off is not paid upon separation under any circumstances,” the auditors wrote.
The previous executive director did not conduct performance evaluations of the fiscal administrative assistant and manager of business development, who were employed for more than six months.
The authority’s Board of Directors placed that executive director, Evan Matthews, on paid administrative leave in June for inappropriate comments made to the news media. He resigned on Oct. 1.
The auditors also found that an employee used an authority debit card to pay for gasoline during a business trip, but also sought full mileage reimbursement.
“It appears that the employee followed the direction of the office manager who approved this transaction,” Geragosian and Kane wrote. “The executive director was also notified of this issue later, but took no corrective action.”
Kooris said he has suspended use of all debit cards.
When the auditors reviewed four payments to attorneys totaling $45,067, they concluded that “in many instances, requested attorneys to perform tasks that would typically be assigned to CPA employees at a significantly lower hourly rate. … The Connecticut Port Authority may have incurred excessive legal expenses.”
The Democratic leaders of the state legislature’s Transportation Committee expressed confidence Thursday in the new direction for the port authority.
“After carefully reviewing the findings in this report, I remain committed to finding solutions to ensure the Connecticut Port Authority serves its purpose,” said Sen. Carlo Leone, D-Stamford. “As co-chair of the Transpiration Committee, I am confident in our ability to address this issue.”
“We are committed to addressing the serious concerns we see in the current structure and will be working with all four legislative caucuses and the governor’s office to ensure the port authority fully meets its obligations to the citizens of our state, while achieving the economic and environmental benefits that were originally envisioned,” said the other co-chair, Rep Roland Lemar, D-New Haven.
The General Assembly created the port authority in 2014 and charged it with overseeing development of the state’s Long Island Sound ports in Bridgeport, New Haven and New London, as well as inland river ports.
The authority has been planning a $93 million investment at State Pier in New London to complement assembly efforts for a major wind generation project planned by Ørsted North America and Eversource in federal waters beyond Long Island Sound. Lamont has said it is crucial that this project is a vital part of shoreline development.
But Senate Minority Leader Len Fasano, R-North Haven, said “This audit is screaming for a public hearing. The Connecticut Port Authority needs to earn back the public’s trust. We need to have confidence in this quasi-public to be a responsible leader when it comes to managing many very important state projects. But the only way to do that is to fully air out these problems.”