Gary airport board wants runway finance review
By Carole Carlson firstname.lastname@example.org/302-0949 February 27, 2014 8:58PM
Updated: April 1, 2014 10:27AM
GARY —The Gary/Chicago International Airport Authority is hiring a legal team to unravel its finances in the wake of a state audit that uncovered numerous financial gaffes in recordkeeping.
“I think it’s the responsible thing to do,” interim airport director B.R. Lane said. “It’s not to suggest wrongdoing.”
The board hired Drinker Biddle & Reath on Thursday to complete a due-diligence review of the airport’s billing on its $166 million runway expansion project and a railroad relocation project.
A forensic accounting firm and a communications firm will assist in the review of documents and communications of billing, as well as interview employees.
Lane said she made the recommendation to protect taxpayers following a State Board of Accounts audit in November that uncovered double billings that in one case resulted in a $10.38 million refund to the Northwest Indiana Regional Development Authority.
The audit reported the airport comingled funds from the RDA, the Indiana Department of Transportation and the U.S. Department of Transportation, making it difficult to identify which invoices had been reimbursed or submitted for reimbursement under each grant award.
Finance Manager Carolyn Keith discovered the multiple billings as she was preparing the annual financial statement. Airport officials contacted the RDA and the $10.3 million was returned Aug. 9.
In addition, the audit stated the Airport Authority requested federal reimbursement for work before paying vendors, which is against policy. The Authority is required to pay vendors prior to claiming reimbursement.
The audit also cited the airport for weakness in internal controls.
Following the audit, Lane submitted a customary corrective action plan to avoid future mistakes.
In other business, the Airport Authority deferred action on the payment of transaction costs in conjunction with the partnership agreement with AFCO AvPorts Airport Management LLC and a development agreement with AFCO Gary LLC until March 10.
Portage resident David Fagan, a union official and former Portage city councilman, has been appointed by the Porter County Commissioners to serve on the Airport Authority.