THE Commonwealth Ports Authority has been working to fix the issues identified in single audit reports for periods ending September 30, 2018, and 2020, according to its board chairwoman, Kimberlyn King-Hinds.
In an interview, King-Hinds said the CPA management “thought that it would be financially prudent to handle it internally.”
However, she said the Federal Aviation Administration “clearly disagrees and I’m not going to debate their position.”
King-Hinds said, “My job is to fix the cause of the issue and we have devoted much of these past couple of months establishing clear SOP’s [special operations procedures] and conducting training so that everyone is clear on what needs to be done.”
FAA Office of Compliance and Management Analysis Director Kevin Willis, in his April 21, 2022, letter to CPA Executive Director Christopher Tenorio, noted a number of findings identified in the 2018 and 2020 audit reports. Among them are issues pertaining to equipment and real property, that Willis noted, “have been ongoing since 2008.”
Willis told Tenorio that CPA “must promptly follow up and take corrective action on the audit findings. In turn, FAA must follow up on audit findings to ensure that the auditee takes appropriate and timely corrective action.” He noted that CPA claims to have resolved the findings, “yet continues to be written up again and again by the auditor in the subsequent years for the same and/or similar issues.”
According to the 2020 single audit report, “CPA lacks control, such as oversight responsibility and monitoring over compliance with equipment and real property management requirements. CPA is in non-compliance with applicable equipment and real property management requirements.”
Willis told Tenorio that “it is clear CPA cannot resolve these issues on their own and thus cannot effectively manage federal awards in accordance with 2 CFR Part 200.”
He told Tenorio that “if CPA fails to resolve all issues by July 31, 2021, FAA will invoke sanctions as prescribed in 2 CFR Section 200.505. It states that, ‘In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, federal agencies and pass-through entities must take appropriate action as provided in Section 200.339.’ ”
Failure to comply may result in the following:
1) Cash payments will be withheld temporarily pending correction of the deficiency by the non-federal entity or more severe enforcement action by the federal awarding agency or pass-through entity.
2) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance.
3) Wholly or partly suspend or terminate the federal award.
4) Initiate suspension or debarment proceedings as authorized under 2 CFR part 180 and federal awarding agency regulations.
5) Withhold further federal awards for the project or program.
6) Take other remedies that may be legally available.
King-Hinds said over the course of these past couple of months, CPA has been in weekly communications with FAA discussing the progress and “it is my expectation that [CPA] management gets this right and continues to do it right moving forward.”
Reimbursable mode
In the same letter, Willis also informed Tenorio that the Airport Improvement Program or AIP funding has been put in a reimbursable mode. This means CPA cannot draw down AIP funds until all the single audit findings are resolved.
Effective immediately, Willis said, FAA is placing “specific conditions” requiring Airport Improvement Program…payments as reimbursements rather than advance payments; and requesting CPA obtain technical or management assistance to resolve all findings and gain auditor acceptance. Specifically, CPA should hire an outside consultant/accounting firm to assist in resolving all single audit findings.”
“Until then, FAA cannot accept your proposed corrective actions,” Willis told Tenorio.
