Tuesday's hearing on the Connecticut Port Authority (Credit: CT Examiner/Hewitt)

Audit Details Lax Oversight, Excessive, Improper and Undocumented Expenses by Connecticut Port Authority

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The Connecticut Port Authority spent thousands of dollars on restaurants, alcohol, and hotel rooms with little oversight or internal controls, according to a report by the State Auditors of Public Accounts released on Thursday.

“Out of 252 transactions selected from CPA bank accounts, 52 (totaling $17,401) had no supporting documentation. Of the 52, 36 pertained to restaurant and hotel expenses, and 16 pertained to other expenses,” according to the report.

Of 141 expenses for travel, food and entertainment expenses, totaling $21,977, the authority could not document 36 of the expenses, or $5,754. Seventeen of the transactions, or $2,701, had itemized receipts, but no clear business purpose.  “Furthermore, 8 of these transactions, totaling $1,910 included alcohol which appeared expensive,” the report read.

Authority staff were reimbursed $541 for two hotel stays in Mystic — in one case for a conference 90 miles away in Darien. In another case, Executive Director Evan Matthews was reimbursed for a 2-night hotel stay in Mystic, for a one-hour presentation at a one-day conference in New Haven.

“CPA spent $67 on 2 transactions for cash withdrawals from its bank account. CPA informed us that these cash withdrawals were for tips. Our review also included 5 transactions related to the purchase of office snacks and beverages totaling $579 in March, April, and June 2018 and April 2019,” according to the report.

In page after page of the report — the first of two planned for the fall — the auditors John C. Geragosian and Robert J. Kane paint a picture of a quasi-public agency in rapid expansion, with exploding costs, and a trail of what auditors characterize as excessive, improper and undocumented expenses.

Excerpted from the auditors’ report of the Connecticut Port Authority

The cost of legal services for the authority, for example, increased from $85,740 to $670,720, but according to the audit, “invoices for legal services did not include critical information, such as itemized rates for each attorney by position and years of service. CPA employees informed us that they began requesting this specific information in May of 2019. Without such critical information, it is not clear how CPA was able to confirm the accuracy of the invoices.”

Often what legal work was done — responding to general audit questions, drafting responses to previous audits, drafting board meeting agenda, etc. — could have been accomplished by authority employees for less money, according to auditors Geragosian and Kane.

Previous audits, that had advised that the authority was breaking state law by failing to abide by Connecticut General Statutes Section 1-101rr — to develop and coordinate ethics policies — and Section 1-121 — requiring the quasi-public authority to develop procedures regarding “affirmative action, personnel practices, the purchase of goods and services, the use of surplus funds, and the distribution of loans, grants, and other financial assistance” — went unheeded, and the CPA continued to violate state law, according to the report.

Reached by phone on Thursday after the release of the reporting, acting port authority chair David Kooris, said that the findings were expected, and shortcomings being addressed.

“Overall frankly it was as expected, there’s some additional detail here that has not made public before but no new findings, no new categories of issue[s] that haven’t been discussed publicly before,” said Kooris. “We’ve closed down the debit card, all travel expenses have to be authorized by me, we’ve limited the utilization of legal to only those necessary instances.”

Excerpted from the auditors’ report of the Connecticut Port Authority

Asked to explain a $220,000 “contribution,” by unnamed developers in 2018-2019 prior to the authority securing a signed agreement, Kooris said that the money “was essentially a repayment … from Eversource and Eversource-Ørsted team to CPA for some of the feasibility costs that went into the due diligence prior to us announcing the partnership.”

In a phone call with CT Examiner on Thursday, Geragosian said “The $220,000 is related to the Gateway project. It’s money from Eversource, related to the construction at State Pier.”

Although, former Board chair and Finance chair Bonnie Reemsnyder could not be reached for comment on Thursday, at an October 23 debate, Reemsnyder said, “I am very proud of the work I did for the Port Authority as Finance Chair. I would dispute some of the statements about the audits. I spoke with the Port Authority members as recently as Friday [October 18] morning and the audits they are conducting now are looking very good.”

In a letter submitted in lieu of appearing at an August 21 hearing of the state legislature’s Transportation Committee, Reemsnyder defended her tenure as finance chair and brief tenure as board chair of the Connecticut Port Authority.

“I am sorry if anyone has been disappointed by or upset over the media accounts of this matter, but can assure you and the citizens of this state that I have not behaved improperly in this instance or otherwise over my 16 years  of public service.”

Asked whether the legislature would schedule hearings — neither Reemsnyder nor former board chair Scott Bates have appeared before the Transportation Committee or answered questions since July — Kooris said, “Short answer is I have no idea — that’s in the legislature’s control. But I’ve been clear that I have no problem going before them again whenever they request because I think we have a lot to share and I’ve been sending them updates when requested, but it’s outside of my hands as to whether and when it happens.”

In a statement released Thursday afternoon responding to the auditors’ report, Governor Ned Lamont, reiterated his administration was not surprised by the report, and was taking direct oversight over the the 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. 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.”

According to statements included in the report, a second audit to “evaluate the sufficiency of CPA’s business and organizational practices and structures is scheduled to complete its report of findings and recommendations in early December. Revised policies and procedures resulting from the consultant’s report and other efforts underway at CPA will be brought forward for CPA Board consideration starting in December of this year and adopted no later than Q1 2020.”

At a September 17 informational meeting in New London, Kooris told the public attendees that there was about a 45-day window to finalize a deal with Eversource-Ørsted on assembling wind turbines at State Pier.