(Feb. 20, 2014, 3:20 p.m., updated 5:52 p.m.) -- The City Auditor today (Feb. 20) issued the findings of an audit of Harbor Dept. travel expenses which concludes that excessive travel expenses were reflecting a decentralized system with limited oversight.
The audit period, which covered a sample of international trips involving Harbor Commissioners between October 1, 2011 and June 30, 2013, was undertaken to assess the reasonableness of travel records and reimbursements, the City Auditor's office stated in its release.
[City Auditor release text] ...[T]he scope of the audit did not assess whether the individual trips audited were necessary or if they resulted in additional business to the Harbor. The audit did look for evidence that business was conducted on the trips but this proved to be difficult as information on meetings was not complete and often lacked detail of participants and objectives.
For the past two fiscal years, the Harbor Department has averaged $600,000 annually in travel expenses. Although the type of travel taken by Harbor representatives can be very complicated to arrange, the department has not dedicated one particular administrative unit to oversee the process. Instead, several parties are involved in making travel arrangements with no evidence of coordination between the parties to ensure costs are consistent among the travelers. Documentation concerning planning, booking, business conducted, and expense review is extremely limited, providing little evidence of the department's efforts to contain costs. These factors contributed to ineligible expenses being reimbursed and large expenses rarely questioned.
The Harbor Department's decentralized system and limited oversight of travel expenses resulted in a variety of issues that the audit categorized into the following groups:
1. Travel costs of spouses subsidized by Harbor
2. Costs reimbursed for early arrivals or late departures
3. Trade representative expenses not questioned
4. High travel expenses
5. Documentation of actual business incurred is limited
6. Additional violations of administrative directives
7. Increase review of credit card statements needed
In a statement released minutes after the Auditor's report was made public, Harbor Commission Doug Drummond stated:
"We have read and reviewed the audit of Harbor Commission travel by City Auditor Laura Doud. We appreciate the input and we take the matter very seriously. In the coming weeks I will be meeting with the City Auditor to discuss her report. I will also schedule a workshop in the near future for the Board of Harbor Commissioners to discuss the recommendations. Harbor Department staff has already reviewed the audit and submitted responses and I look forward to a productive discussion with my colleagues on the Commission.
[update] John McLaurin, President of the Pacific Merchant Shipping Ass'n, said on Twitter: "LB Auditor identified minor administrative policy changes that do not justify the removal of a Harbor Commissioner." [end update]
Additional reaction is pending and will be added here as newsworthy.
LBREPORT.com hasn't had an opportunity to review the report in detail; we publish our initial report here as breaking. The full report can be viewed on the City Auditor's website at: www.CityAuditorLauraDoud.com (at this linked pdf page).
The audit came in the wake of questions raised during City Hall's FY 14 budget cycle by the Council's Budget Oversight Committee chair Gary DeLong, aimed primarily at then-Harbor Commission President Tom Fields...who had taken positions on a number of high visibility items contrary to those of Mayor Bob Foster. Fields defended his record; said Foster had asked him to step down, which he refused to do, prompting Foster to bring an agenda item asking the Council remove Fields alleging Fields' unwillingness to harmonize Port positions with those of City Hall. Removing a Commissioner requires a 2/3 Council vote, which Foster barely received: 6-3 (Schipske, Austin and Neal dissenting) on November 19, 2013.
Fields removal was followed within days by the resignaton of Commissioner Nick Sramek, who said [paraphrase] Commission decisions had become highly politicized.
The Council action to remove Fields came after Councilman Austin, seconded by Councilwoman Schipske, made a motion to "receive and file" (take no action) on the Mayor's request. Fields had asked the Council to delay the decision to remove him until an audit of his and other Harbor Dept. travel expenses was released [then-espected in January, something also suggested by two of the dissenting councilmembers, Schipske and Austin (which the Mayor-supportive majority refused to do.]
