Woods Hole, Martha's Vineyard, and Nantucket Steamship Authority

This is a Massachusetts State Auditor report on the ferry authority serving Nantucket and Martha’s Vineyard.

“The Woods Hole, Martha’s Vineyard, and Nantucket Steamship Authority (Steamship Authority) was created by Chapter 701 of the Acts of 1960, as amended, to provide “adequate transportation of persons and necessaries of life for the islands of Nantucket and Martha’s Vineyard.””

The auditor reviewed whether the Steamship Authority had proper controls, followed rules, and managed revenue, purchases, contracts, and a prior theft-related issue appropriately.

“The audit objectives consisted of a determination of whether the Steamship Authority implemented effective internal controls over all aspects of its operations and an assessment of the Steamship Authority’s business practices and its compliance with applicable laws, rules, and regulations.”

The Steamship Authority handles essential ferry service, major public-facing revenue, large assets, and debt, so weak controls could put money and services at risk.

“Without a documented internal control plan and an agency-wide risk assessment, there is inadequate assurance that the Steamship Authority will achieve its goals and objectives efficiently, effectively, and in compliance with applicable laws, rules, and regulations, and will properly safeguard its assets against potential loss, theft, or misuse.”

If you use the ferries, park at terminals, or live in a community tied to the ferry system, this audit says the authority’s 2010 revenue and purchasing controls were found complete and compliant.

“As of December 31, 2010, the Steamship Authority operated and maintained a fleet of nine vessels and employed up to 750 people during its summer peak season.”

The prior problem was marked resolved because the authority created a formal control plan and risk assessment.

“Our current review determined that the Steamship Authority has formalized an internal control plan and completed a risk assessment that covers all of its operations.”

Management said it will keep updating the controls and risk assessment as the authority’s needs change.

“In addition, management of the Steamship Authority stated that the internal controls and risk assessment will continually be updated to meet the changing needs of the Steamship Authority.”

The report is significant because it says the authority fixed a previously identified weakness, including adding controls after employee theft involving credit card refunds.

“As a result of these thefts, the Steamship Authority immediately implemented new internal controls and procedures for the processing, reporting, and oversight of these transactions.”

An internal control plan means written rules and checks for handling money and operations; a risk assessment means looking for things that could go wrong and deciding what safeguards are needed.

“In addition, the Steamship Authority did not complete and document a risk assessment to determine what internal control procedures are needed to minimize the identified risks.”