Massachusetts Port Authority

This is a state audit of certain Massport administrative expenses through April 30, 2000.

“Our audit was conducted to determine whether certain Massport administrative expenses were reasonable, relevant to Massport’s mission, and in compliance with Massport policies and procedures.”

Auditors looked at whether selected Massport spending fit Massport’s mission, followed its rules, was reasonable, and was recorded in the right accounts.

“The objectives of this audit were to determine whether expenses charged to certain administrative accounts were (1) relevant to Massport’s mission, (2) reasonable and in compliance with Massport policies and procedures, and (3) charged to the proper accounts.”

When expenses are put in the wrong accounts, managers and the public can get a distorted picture of how money is being spent.

“Misclassifying expenses subverts the budgetary process, prevents management from monitoring accounts and controlling expenses, and causes the accounting department to spend time to analyze accounts and make adjusting entries.”

For an ordinary citizen, the issue is whether a public authority used its money carefully and kept enough records to show what taxpayers and users were getting for that spending.

“Without the names of the persons who performed the services, the actual hours spent, and the nature of the services provided, Massport has no mechanism for determining how many hours the consultants worked, the level of staff and their hourly rates, and what it received for its money.”

The auditor did not say everything was broken, but did flag specific problems with spending controls and documentation.

“Based on our review we concluded that, except for the issue addressed in the Audit Results section of this report, during the 22-month period ended April 30, 2000, the Authority maintained adequate management controls and complied with applicable laws, rules, and regulations for the areas tested.”

The report is significant because it questions more than half a million dollars in contributions and says Massport lacked agreements or documentation that would protect the public interest.

“Furthermore, making contributions to entities such as the National Music Foundation and the Massachusetts International Festival of the Arts without entering into any grants or contract agreements provides inadequate assurance that the money is spent in accordance with the wishes of Massport and precludes the recovery of funds spent inappropriately.”

“Misclassified expenses” means costs were charged to the wrong budget category, such as treating contributions as special events spending.

“For example, included in the $606,500 of questionable contributions noted in Audit Result No. 1 was $501,500 charged to the Special Events Account instead of the Contributions Account.”