‘Extremely troubling’ deficiencies cited in audit of Erie Basin Marina operator
When a yacht rumored to be owned by Ivana Trump cruised into Erie Basin Marina a year ago, the private operator of the city-owned facility decided to give the Gran Finale a break.
The boat was given a discount of one day free for four days in dock, the rationale being that the mysterious $40 million luxury vessel was spending a lot of money on fuel and also luring crowds.
But a scathing new audit criticizes marina operations and insists that action is symptomatic of a vendor that has a track record of weak internal controls, shoddy recordkeeping and taking liberties with its contract. The report criticizes Brand-On Services for delays in correcting deficiencies red-flagged four years earlier and, in some areas, for failing to make any changes.
The findings are “extremely troubling,” said City Comptroller Andrew A. SanFilippo, who touted the marina’s importance to revitalizing the waterfront. If deficiencies aren’t corrected, the city should end the contract with Brand-On when it comes up for renewal next year, he said.
“These kind of pervasive problems are totally unacceptable,” he said, and they raise questions about “whether the city should continue to do business with [Brand-On].”
SanFilippo said chief auditor Darryl McPherson found recordkeeping problems involving slip rentals, food purchases and boat launches. One of the biggest problems, McPherson said, involves lax monitoring of fuel sales.
“There’s a strong potential for abuse,” he said.
SanFilippo stopped short of alleging improprieties, but he said Brand-On’s sloppy records make it impossible to determine whether the city has received its fair share of revenues.
“You can’t continue with practices that don’t even allow us to verify revenues,” SanFilippo said.
McPherson also has raised concerns that a city public works employee is actively involved in Brand- On Services of Buffalo, the marina’s operator. Michael J. Wolasz Sr. has been the company’s point man for marina issues since it received a contract to run the facility in 2001.
“Efforts must be made to make sure that time spent on marina issues is not being done on city time,” McPherson said.
Last July’s incident involving Wolasz’s decision to give a discount to the yacht illustrates a mind-set that McPherson finds troubling. Erie Basin Marina belongs to the city—not to Brand-On, he said.
“The vendor has to operate under certain restrictions. It’s not up to the vendor to allow public property to be used at his sole discretion,” McPherson said.
On the positive side, the audit credited Brand-On for helping to boost Marina sales by nearly 75 percent from 2004 to 2007.
“The revenues generated have exceeded some expectations, but internal controls of these revenues is grossly inadequate,” the audit concludes. The audit raises “serious and legitimate” concerns that are being addressed, said Public Works Commissioner Steven J. Stepniak, whose department oversees the marina.
But the commissioner noted that the audit period was largely confined to 2007. Some steps were taken last year to improve operations, he said, while other changes have been made in the last several weeks. A recent safeguard ordered by Stepniak involves biweekly reviews and “unannounced random visits” to verify cash receipts, boat slip occupancy and other issues.
Stepniak added that questions about Wolasz’s dual roles as a city Water Division employee and a principal in Brand-On are also legitimate concerns. He said a log book will be reviewed regularly to make sure that Wolasz is not doing marina business on city time.
Mayor Byron W. Brown’s spokesman said the administration is preparing a written response to the audit and is also reviewing material submitted by Wolasz. Until the report is finished, Peter K. Cutler said, there would be no further comment.
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