Audit of the Fall River Line Pier, Inc. (FRLP)

This is a state performance audit of Fall River Line Pier, Inc., a nonprofit corporation connected to the Fall River pier.

“I am pleased to provide this performance audit of Fall River Line Pier, Inc.”

The auditor checked whether FRLP properly managed non-payroll spending and accounts receivable during the audit period.

“In this performance audit, we determined whether FRLP properly administered its financial activities related to non-payroll expenditures and accounts receivable during the audit period.”

If spending and collections are not managed well, public-facing organizations can waste money and fail to collect revenue they are owed.

“When financial activities such as these are improperly administered, there is a higher-than-acceptable risk of wasteful and unnecessary expenses being incurred, and revenue may not be realized.”

For ordinary residents, this matters because the pier exists to serve the South Coast by supporting freight and merchandise shipment by water.

“Fall River Line Pier, Inc. (FRLP), located at 1 Water Street in Fall River, was created by Chapter 665 of the Acts of 1945 to establish, operate, and maintain a pier in Fall River, serving the South Coast area, for the shipment of freight and merchandise by water.”

The audit concluded that FRLP had problems with conflict-of-interest disclosures, mission-related spending, and collecting money owed by tenants.

“FRLP paid $121,874 to companies in which three FRLP board members had a financial interest; the board members did not properly disclose their relationships with the companies.”

The auditor recommended that FRLP create clear rules for conflicts of interest, travel, donations, and collecting unpaid bills.

“FRLP’s board of directors should establish policies and procedures related to its financial activities, including conflicts of interest, travel, donations, and accounts receivable.”

The key governance issue is that board members are supposed to protect the organization’s interests and put controls in place before conflicts can affect decisions.

“Board members have a responsibility to establish controls that prevent related-party transactions unless the board determines that they are clearly in the agency’s best interest.”

A related-party transaction means doing business with someone already connected to the organization, such as a board member or a company tied to one.

“A related-party transaction is a transaction between parties who had an association before the transaction.”