April 16, 2024
Finance Department
DATE: April 16, 2024
TO: Mayor Martinez and Members of the City Council
FROM: Nickie Mastay, Deputy City Manager, Internal Services Andrea Miller, Director of Finance
Nannette J. Beacham, Director of Economic Development
Charles Gerard, Port Director
Subject: Presentation of Management and Performance Audit of the Port of Richmond
FINANCIAL IMPACT: There is no fiscal impact from receiving this presentation.
PREVIOUS COUNCIL
ACTION:
April 18, 2023 and June 6, 2023
STATEMENT OF THE
ISSUE:
Presentation of the Port Audit from Government
Performance & Policy (GPP) Analytics Inc.
RECOMMENDED ACTION: RECEIVE a presentation from Government Performance & Policy (GPP) Analytics Inc. on the Management and
Performance Audit of the Port of Richmond – Finance
Department (Nickie Mastay 510-620-6602/ Andrea Miller
510-620-6790/ Nannette Beacham 510-621-1306/
Charles Gerard 510-620-6792).
DISCUSSION:
Background
On January 31, 2023, the Finance Department issued a Request for Proposals (RFP) for auditing and professional services for the Port of Richmond. The RFP was posted on AGENDA
REPORT
April 16, 2024
the City’s BidsOnline system where 320 vendors were notified, and 14 vendors downloaded copies of the RFP. On February 27, 2023, a single electronic proposal was received. The proposal was reviewed by City staff on March 31, 2023. City staff presented the evaluation result to City Council on April 18, 2023. On June 6, 2023, the City Council approved a contract with Government Performance & Policy (GPP) Analytics Inc. to provide auditing services for the Port of Richmond in an amount not-to- exceed $81,750.
GPP Analytics Inc. began a management and performance audit of the Port of Richmond on June 15, 2023. The goals of the audit were to evaluate the management, efficiency, and effectiveness of all Port operations and services. The audit was a comprehensive review of operational and administrative functions, including but not limited to use of public funds, compliance with regulatory requirements, internal controls, resource and staff management, technology, stakeholder responsiveness, lease management integrity, and financial practices. The audit was performed in accordance with the International Professional Practices Framework (IPPF) by the Institute of Internal Auditors and the U.S. Government Accountability Office's Generally Accepted Government Auditing Standards (GAGAS).
Below are the key findings from the audit report:
The Port of Richmond's lack of a strategic plan undermines operational efficiency and clarity in investment priorities, necessitating the development and adoption of a strategic plan for better resource allocation and viability. Without written procedures for managing operating revenue and assets, the Port faces operational risks, particularly during staff changes, underscoring the need for formalized processes and a succession strategy.
Significant maintenance issues and unplanned financial burdens highlight the need for a Maintenance Manager, a clear billing system, and an asset condition assessment.
The absence of dedicated finance staff and insufficient financial oversight has stunted revenue growth and financial planning capabilities, calling for the reinstatement of a Finance Manager for the Port.
The lack of documented leasing procedures compromises the transparency and optimization of tenant agreements, requiring the establishment of Port-specific leasing processes.
The Port's reliance on tenant-reported figures without independent verification poses risks to revenue assurance, pointing to the need for robust verification procedures and staffing.
Insufficient environmental compliance and lease monitoring expose the Port to legal and financial risks, necessitating explicit monitoring policies and compliance documentation.
April 16, 2024
Vacant properties are at risk without adequate security measures, leading to potential costs and negotiation delays, highlighting the importance of security protocols for unleased buildings.
The Port's undocumented debt to the City's General Fund complicates legal compliance, urging a review of documentation practices and loan justifications within City departments.
The practice of using personal email accounts for City business risks compliance issues, suggesting the need for updated policies and employee education on technology use.
DOCUMENTS ATTACHED:
Attachment 1 – Management and Performance Audit Report
Attachment 2 – Contract - GPP Analytics, Inc. (including Request for Proposal and GPP Analytics, Inc. Proposal)
Attachment 3 – Presentation