Investigation of the Waterfront Commission of New York Harbor

provides no details or guidance as to how each division should perform its role. Themanual also completely neglects to list or discuss the role of comptroller at theWaterfront Commission. As discussed below in this report, this omission led, in part, tothe Waterfront Commission’s comptroller disclaiming responsibility for any of thefinancial accountability problems at the Waterfront Commission.The individual divisions also lacked the necessary guidance which currentpolicies and procedures would have provided. For example, the Police Division did nothave a comprehensive operations manual of policy and procedures. New detectives hiredat the Waterfront Commission, many of whom had no prior law enforcement experiencewhatsoever, were supplied only with the standard Waterfront Commission’s Employees’Manual. The lack of appropriate policies and procedures in the Police Division isproblematic, as it would be in any police department, given the powers of a police officer,which include the ability to carry a firearm, make arrests, and conduct warrantlesssearches. Because Waterfront Commission detectives are police officers in both NewYork and New Jersey, states with different criminal laws and procedures, the problemsresulting from the lack of appropriate policies and procedures are even more glaring.While the Audit and Control Division did have some guidelines in place, theywere outdated and failed to address contemporary issues. The audit guidelines providedto the Inspector General were not dated; although, later amendments indicate that theywere created sometime prior to July 1992, and were last updated in April 1996. Theoutdated regulations specifically discuss the licensing of two companies which theWaterfront Commission no longer licensed. In addition, another section instructsauditors to scrutinize receipts from certain restaurants that no longer exist.The audit guidelines were also never updated to adapt to the changes in the typesof companies located on the piers. Historically, the companies operating on the pierswere smaller, family-owned operations. Today, the majority of the companies are ownedby larger corporations, in some cases international corporations. The audit guidelineswere written to handle far less complicated corporate structures. As discussed later,adhering to these outdated audit guidelines contributed to the Waterfront Commission’saudit backlog, some delinquent as much as 14 years.The audit policy also failed to address the issuance of licenses by the WaterfrontCommission. Audits play a central part in determining whether a stevedoring companyreceives a permanent license. Yet, not one auditor interviewed by the Inspector Generalwas aware of this crucial role, in part, because of inadequate audit policies.Policies regulating the Commission’s finances were also lacking, and failed toaddress procurement, accountability of forfeiture funds, and tracking of overtimepayments. As discussed in this report, the Commission’s comptroller did not attempt toestablish such policies, nor did he have adequate systems in place to manage theCommission’s finances.In its formal response to this report, the Commission agreed that it had suffereddue to lack of policies:9