Audits confirm fiscal mismanagement of ports throughout governor’s term


Kimberlyn King-Hinds

The Commonwealth Ports Authority, according to its latest audited financials by Deloitte, has repeated and not resolved several material weaknesses, significant deficiencies, and questioned costs throughout the administration of Gov. Ralph Torres. His appointed chairwoman of the ports, Kimberlyn King-Hinds, has otherwise touted publicly her agency’s fiscal prowess.

The audit, for which the Federal Aviation Administration hounded CPA for six months past its due date and finally was done December 23, 2021, confirmed to the FAA the local agency’s continued fiscal mismanagement.

Among the findings were a list of 39 payments totaling more than $2 million the CPA made for which the procurement officer did not certify compliance that the contracts were for public purposes, or that CPA funds were not wasted or abused. The audit does not state which companies were paid these disbursements, but the payments range from a $300 payment journalized on March 31, 2020 to a $487,638 payment posted September 30, 2020.

This finding was only one of 13 sub-findings contained in one of five main findings under the audit’s Schedule of Findings and Questioned Costs.

“CPA lacks controls, such as oversight responsibility and monitoring, over compliance with procurement rules and regulations,” the audit states. “CPA is in noncompliance with applicable procurement rules and regulations requirements for non-Federal transactions.”

The audit confirms several of the findings resulted from questionable sole source procurements that occurred outside the authority given by law.

CPA received every poor mark possible in its audit: qualified with material weaknesses and significant deficiencies found in its internal control over financial reporting and internal control over major federal programs, noncompliance material to the financial statements noted, audit findings material to violations of the Code of Federal Regulations governing FAA grants, and the designation of CPA in a category other than low-risk auditee.

“Expenditures are misstated,” the audit states. “Also, CPA is noncompliant with applicable internal control policies to confirm expenditure are adequately substantiated.”

Financial mismanagement happening year after year

The findings of the single audit of federal funds expenditure show repeat offenses and correlate with a second audit, also completed six months past the deadline on December 23, 2021. According to Deloitte’s audit of CPA’s passenger facilities charge (PFC) program, four major findings revealing repeated and growing financial mismanagement of the Commonwealth’s ports continue.

“The lack of monitoring project costs was reported as a finding in the PFC audits for fiscal years 2005 through 2019,” the audit states. Reporting compliance problems were the same: “Noncompliance with Section 158.63 of 14 CFR Part 158 was reported as a finding in the PFC audits for fiscal years 2005 through 2019,” and again in fiscal year 2020.

CPA could not even manage to follow up with the airlines to remit the PFC timely for the past seven fiscal years, according to the audited financials. And for the past 11 years, CPA has not kept appropriate accounting records of the PFC.

In total, the agency as of its latest audit, has $879,477 in questioned costs from the PFC program alone.


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