Audit finds significant lack of financial oversight at Port of Peninsula

The Port of Peninsula mismanaged its revenues, resulting in financial disarray, and failed to follow parts of the Open Public Meetings Act, the Office of the Washington State Auditor reported today.

“It’s not enough for government officials to say they are being accountable to the public; the public must have access to the information they need to hold a government accountable,” said State Auditor Pat McCarthy. “This audit shows the port’s elected commissioners need to demonstrate accountability with actions – being transparent, keeping documentation, following the Open Public Meetings Act. Nothing else generates public confidence."

A routine audit of the Pacific County port’s operations in 2021 and 2022 was significantly delayed by difficulties in obtaining documentation, and ultimately identified several financial and accountability issues, including the port:

• Collecting less than half the $656,438 in charges for goods and services it billed because it stopped formal customer billing and instead relied on handwritten receipts
• Deducting $57,980 from employee paychecks for benefits such as retirement and IRS withholdings, but not paying that money to respective state and federal agencies. The port subsequently paid these amounts in 2023.
• Allowing lease agreements to expire and continuing them beyond any applicable renewal periods. Additionally, the port did not provide documentation to show it performed a formal lease rate evaluation in recent years. As a result, its lease revenues are likely significantly less than fair market value, which could be considered a gifting of public funds.

Auditors found the port’s failure to properly manage its revenues depleted its general fund, requiring it to borrow from its industrial development fund to continue operations.

Auditors also found the port did not post minutes for Board of Commissioners meetings timely, as required by the Open Public Meetings Act. The port did not provide any 2022 minutes to auditors until December 2023 and did not provide any 2023 minutes until July 2024. The port also canceled multiple public meetings during the audit period and was unable to demonstrate that it consistently did so in accordance with guidance outlined by the state attorney general.

In a third audit finding, our Office reported the port filed its required 2021 annual financial report 318 days late and its 2022 annual financial report 344 days late.

The full report, including the port’s responses to findings, can be found on the State Auditor’s Office website: Port of Peninsula - Accountability Audit Report (Jan. 1, 2021, through Dec. 31, 2022).

Media questions: Assistant Director of Communications Adam Wilson, Adam.Wilson@sao.wa.gov, 564-999-0799