Utah Inland Port Authority needs clear plan for future before spending $150M bond, auditors say

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SALT LAKE CITY — The Utah Inland Port Authority wants to stipulate clear objectives for the longer term — which it hasn’t but executed — earlier than beginning to spend a number of the $150 million in bonds accepted final 12 months, based on a brand new report.

The restricted overview by the state Legislative Auditor Common’s Workplace started in spring this 12 months after the Utah Legislature modified the Utah Inland Port Authority Board’s make-up, and the brand new board was sworn in, in Might. Auditors famous within the report the board requested them to carry out the overview to “present course and potential threat areas as fast as doable.”

Auditors say they discovered a couple of “considerations,” together with “monetary dedication with out satisfactory planning, gaps in organizational construction that cut back inside controls, and the necessity for stronger procurement and contract administration.”

The auditors say the Inland Port Authority wants to put out a long-term plan, referred to as a grasp growth plan, to stipulate its objectives and targets and information growth selections. That should occur earlier than the authority spends the “sizable bond” it took out, apart from funding that will get accepted by the Inland Port Authority Board, based on the report.

The Inland Port Authority has a request for proposal looking for a marketing consultant to assist create a grasp growth plan, which auditors referred to as a “constructive step.” However auditors famous they’re “involved this has not been a better precedence on the port” — and the board ought to be certain that a grasp growth plan is in place earlier than utilizing the bond issued final winter.

The port authority marked a big enhance in spending from 2021 to 2022 due largely to $8.02 million for an up-front lease-to-own fee for the Stadler Rail check monitor, and $6.31 million put aside for safety of the port’s $150 million bond safety, auditors stated.

Port authority employees members informed auditors the Stadler Rail challenge was “beforehand recognized” as a state precedence, however auditors say the board ought to nonetheless “fastidiously weigh” whether or not such initiatives are a good suggestion for the port.

The Stadler Rail manufacturing plant within the space of 5600 West and 150 South is without doubt one of the initiatives the port authority has checked out to enhance Utah’s importing and manufacturing logistics. The constructing is near the place a proposed rail spur check monitor is being thought-about — utilizing the bonds, officers stated final 12 months.

Auditors stated the inland port can also be spending a big sum of money on rental and lease prices for buildings and land. For instance, the Inland Port Authority spent about $2.4 million from 2020 to 2022 on land put aside for a transload facility. A big soar on this 12 months’s spending is “primarily from about $4.6 million for the development of a street within the Northwest Quadrant of the port,” based on the overview.

“Once more, whereas these selections might show to be prudent, we’re involved about important monetary commitments being made with public funds earlier than a grasp growth plan is developed and all choices are thought-about,” auditors wrote.

Auditors additionally inspired extra involvement from the board to “maintain employees accountable” for outcomes. The audit advisable an audit committee and treasurer be put in place to strengthen this system’s inside controls.

“The finances overview course of is one other space that deserves extra consideration. Employees ought to make extra data publicly accessible for board members and the general public to know (Utah Inland Port Authority’s) finances,” the report states.

Auditors stated they discovered that in working with contractors, the port authority “didn’t have satisfactory measurable metrics and timelines in contracts to supply construction and accountability with contractors,” pointing to a different cause for extra board member involvement.

“We’re inspired to see that the port has been attentive to this and is engaged on enhancements to their course of,” auditors wrote.

The report additionally notes contractors are largely “sole sourced” by the Inland Port Authority, which means it solicits contract proposals from just one enterprise at a time reasonably than going by the everyday, aggressive request for proposal course of.

“This reduces transparency and might foster an surroundings the place public sources should not adequately safeguarded,” auditors wrote.

However as a separate entity from the state, the Utah Inland Port Authority is exempt from the procurement guidelines that state companies are required to comply with, based on the audit. The overview didn’t look into whether or not the authority needs to be topic to the identical procurement and transparency necessities, however auditors advised it as a problem for the Legislature to take a look at transferring ahead.

In a letter responding to the audit, the Utah Inland Port Authority board members and Govt Director Ben Hart stated they “wholeheartedly agree with all suggestions within the audit and have directed UIPA administration, together with new UIPA govt director Ben Hart, to maneuver ahead with implementing them together with different finest practices.”

The letter states that the Inland Port Authority has had unbiased monetary auditors overview its monetary statements yearly, and so they discovered that each one expenditures have been made “in accordance with the board accepted budgets and insurance policies and legislative statute.”

The board members and govt director additionally famous that the Inland Port Authority is “a studying and rising group,” and thanked auditors for the strategies.

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