State auditors found some oversight and reporting deficiencies during their inspection of the books of the Maryland Aviation Administration, which operates
The review by the Office of Legislative Audits discovered instances where agency officials did not maintain adequate control over architectural and engineering contracts totaling $38.3 million, used unapproved subcontractors on projects, misled the Board of Public Works, did not adequately control some purchase orders and kept inadequate inventory records.
However, the 18-page report did not uncover any instances of fraud, and the auditors made eight recommendations to tighten fiscal controls, all of which the aviation administration endorsed. An audit in 2009 also resulted in eight recommendations, which the "MAA satisfactorily addressed," the auditors found.
The latest review covered 32 months, ending July 31, 2011.
"Obviously, we take any audit seriously," said Paul Wiedefeld, MAA executive director. "There was no fraud or abuse, but there are some process issues we have to address and clean up. We've already addressed four of the findings and expect to address the other four shortly."
State Sen. James Rosapepe, co-chairman of the General Assembly's Joint Audit Committee, said he did not see anything in the report to cause alarm.
"The auditors identified some i's that weren't dotted and some t's that weren't crossed, but that's what audits are for," he said.
Producing more than $475 million in annual state and local tax revenue and supporting nearly 100,000 jobs, Baltimore-Washington International Thurgood Marshall Airport is considered one of Maryland's primary economic engines.
Airport officials routinely oversee construction and service contracts worth millions of dollars.
But the audit showed that during the period of November 2008 through June 2011, officials did not adequately monitor payments to 21 consultants on major capital projects or keep track of unspent balances on contracts worth $38.3 million.
"Although, using multiple sources, MAA was able to eventually compile the financial information for selected contracts we requested during the audit, the lack of readily available comprehensive records prevented MAA from effectively monitoring contract expenditures and remaining balances," the report said. "This information is critical to ensure that contracts are not overspent and to provide a means to determine when additional contracts may need to be procured."
The review also noted that in seeking approval for a $10 million architectural and engineering contract in March 2011, aviation administration officials did not tell the Board of Public Works that a $21.4 million contract with the same vendor still had an unspent balance of $7.2 million. Four months later, officials asked for a two-year extension on the $21.4 million contract, warning that without a positive vote, the vendor might have to be terminated or the work assigned to another firm.
"However, this statement was inaccurate since MAA had awarded the aforementioned five-year, $10 million contract in March 2011, just four months previously to the same vendor for the same comprehensive construction management and inspection services. No funds had yet been spent on the $10 million contract," the audit noted.
Wiedefeld said the airport plans far in advance on projects and knows the "burn rate" on the money in the contract.
"Even though we hadn't spent all the money, we knew the work was coming," he said. "You can't wait until the contract runs out and then start it up again."
Wiedefeld said his staff is working with the Department of Transportation to guarantee that financial information can be easily accessed and is securing independent audits to ensure overhead and labor costs billed by contractors and subcontractors comply with the terms of their contracts.