CRESCENT CITY CONNECTION DIVISION HOUSE RESOLUTION NO. 13 PERFORMANCE AUDIT ISSUED MARCH 26, 2009 LEGISLATIVE AUDITOR 1600 NORTH THIRD STREET POST OFFICE BOX 94397 BATON ROUGE, LOUISIANA 70804-9397 LEGISLATIVE AUDIT ADVISORY COUNCIL REPRESENTATIVE NOBLE E. ELLINGTON, CHAIRMAN SENATOR NICHOLAS “NICK” GAUTREAUX SENATOR WILLIE L. MOUNT SENATOR EDWIN R. MURRAY SENATOR BEN W. NEVERS, SR. SENATOR JOHN R. SMITH REPRESENTATIVE NEIL C. ABRAMSON REPRESENTATIVE CHARLES E. “CHUCK” KLECKLEY REPRESENTATIVE ANTHONY V. LIGI, JR. REPRESENTATIVE CEDRIC RICHMOND LEGISLATIVE AUDITOR STEVE J. THERIOT, CPA DIRECTOR OF PERFORMANCE AUDIT DAVID K. GREER, CPA FOR QUESTIONS RELATED TO THIS PERFORMANCE AUDIT, CONTACT KERRY FITZGERALD, CPA, PERFORMANCE AUDIT MANAGER, AT 225-339-3800. Under the provisions of state law, this report is a public document. A copy of this report has been submitted to the Governor, to the Attorney General, and to other public officials as required by state law. A copy of this report has been made available for public inspection at the Baton Rouge office of the Legislative Auditor. This document is produced by the Legislative Auditor, State of Louisiana, Post Office Box 94397, Baton Rouge, Louisiana 70804-9397 in accordance with Louisiana Revised Statute 24:513. Thirteen copies of this public document were produced at an approximate cost of $138.58. This material was produced in accordance with the standards for state agencies established pursuant to R.S. 43:31. This report is available on the Legislative Auditor’s Web site at www.lla.la.gov. When contacting the office, you may refer to Agency ID No. 9726 or Report ID No. 40080007 for additional information. In compliance with the Americans With Disabilities Act, if you need special assistance relative to this document, or any documents of the Legislative Auditor, please contact Wayne “Skip” Irwin, Director of Administration, at 225-339-3800. LOUISIANA LEGISLATIVE AUDITOR STEVE J. THERIOT, CPA March 26, 2009 The Honorable Joel T. Chaisson, II, President of the Senate The Honorable Jim Tucker, Speaker of the House of Representatives Dear Senator Chaisson and Representative Tucker: This report provides the results of the Crescent City Connection Division audit that resulted from House Resolution No. 13 of the First Extraordinary Legislative Session of 2008. The report contains our findings, conclusions, and recommendations. Appendix A contains the Department of Transportation and Development’s response to this report. Appendix I contains copies of three other audit reports recently conducted on the Crescent City Connection Division, which the Department of Transportation and Development submitted to us with its response to this audit. I hope this report will benefit you in your legislative decision- making process. We would like to express our appreciation to the management and staff of the Louisiana Department of Transportation and Development and the Crescent City Connection Division for their assistance during this audit. Sincerely, Steve J. Theriot, CPA Legislative Auditor SJT/dl CCCD09 1600 NORTH THIRD STREET • POST OFFICE BOX 94397 • BATON ROUGE, LOUISIANA 70804-9397 WWW.LLA.LA.GOV • PHONE: 225-339-3800 • FAX: 225-339-3870 _________________________________________________ TABLE OF CONTENTS Executive Summary.......................................................................................................................3 Introduction....................................................................................................................................4 Audit Initiation and Objectives ...............................................................................................4 Overview of the Crescent City Connection Division..............................................................5 Scope and Methodology.................................................................................................................7 What Were CCCD’s Revenues, Sources of Revenues, Expenses, and Types of Expenses for the Past Five Fiscal Years? ...........................................................8 Has the Crescent City Connection Oversight Authority Met Its Statutory Duties?..........................................................................................................10 Has DOTD Exercised Sufficient Oversight Over CCCD’s Contracting Activities?..............13 We Could Not Be Certain That We Received All CCCD Contracts ..........................................13 DOTD Has Not Ensured That CCCD Contracts Clearly Include All Basic Provisions Recommended by Authoritative Sources................................................15 DOTD Has Not Required CCCD to Formally Document Its Monitoring of Contracts or Report Monitoring Results............................................................17 Contract Plan Changes Totaled Over $3.7 Million .....................................................................19 CCCD Did Not Prepare Plan Changes for Additional Charges Incurred on Some Contracts........................................................................................21 Did CCCD Engineers Complete All Required Ferry Maintenance Tasks for the Period Examined?..............................................................................................22 Did CCCD Meet Its Targeted Performance for Completing Scheduled Ferry Trips in Fiscal Year 2008?...........................................................................24 Exhibits Exhibit 1: CCCD Toll Rates, January 1989 Through Present ..................................................6 Exhibit 2: CCCD Revenues, Fiscal Years 2004 Through 2008 ...............................................8 Exhibit 3: CCCD Revenues, Expenditures, and Fund Balance Fiscal Years 2004 Through 2008...........................................................................9 Exhibit 4: Status of CCCD Projects Prioritized by CCCOA As of October 2008..............................................................................................10 - 1 - CRESCENT CITY CONNECTION DIVISION __________________________________ Exhibits (Cont.) Exhibit 5: Number of CCCOA Meetings Required and Held July 1, 1998 Through December 31, 2008...........................................................11 Exhibit 6: Basic Provisions Included and Not Included in CCCD Contracts Fiscal Years 2004 Through 2008.........................................................................16 Exhibit 7: Excerpt From Appendix G, Fiscal Years 2004 Through 2008 ..............................20 Exhibit 8: Contract Payments Exceeding Total Contract Amounts Without Approved Plan Changes July 1, 2003 Through November 19, 2008 ..........................................................21 Exhibit 9: Reasons Scheduled Ferry Trips Not Completed Fiscal Year 2008 ..................................................................................................24 Exhibit 10: Scheduled Ferry Trips Not Completed Fiscal Year 2008 ..................................................................................................25 Appendices Appendix A: Management’s Response ..................................................................................A.1 Appendix B: House Resolution No. 13 of the First Extraordinary Legislative Session of 2008 ............................................................................B.1 Appendix C: List of CCCD Projects According to R.S. 47:820.5 .........................................C.1 Appendix D: CCCD Expenditures, Fiscal Years 2004 Through 2008...................................D.1 Appendix E: CCCD Capital Outlay Expenditures by Project Fiscal Years 2004 Through 2008.................................................................... E.1 Appendix F: Summary of CCCOA Meetings July 1, 1998 Through December 31, 2008...................................................... F.1 Appendix G: CCCD Contracts, Fiscal Years 2004 Through 2008.........................................G.1 Appendix H: Scheduled Ferry Trips Not Completed by Location and Reason, Fiscal Year 2008 ....................................................H.1 Appendix I: Additional CCCD Audit Reports....................................................................... I.1 - 2 - Office of Legislative Auditor Steve J. Theriot, CPA, Legislative Auditor Crescent City Connection Division of Louisiana Department of Transportation and Development, Response to House Resolution No. 13 of the First Extraordinary Legislative Session of 2008 March 2009 Audit Control # 40080007 Executive Summary This report provides the results of our performance audit of the Crescent City Connection Division (CCCD) of the Louisiana Department of Transportation and Development (DOTD). We conducted this examination in response to House Resolution No. 13 of the First Extraordinary Legislative Session of 2008. The resolution requests the legislative auditor to conduct a performance audit on the operations of CCCD. Appendix B provides a copy of the resolution. We used the resolution and information DOTD and CCCD provided to develop the audit objectives. The audit objectives and results of our work are as follows: Objective 1: What were CCCD’s revenues, sources of revenues, expenses, and types of expenses for the past five fiscal years? Results: CCCD’s total revenues for the past five fiscal years were almost $145 million. Of this amount, approximately $103 million (71%) was derived from bridge and ferry operations. Expenditures for this time period totaled almost $170 million. Expenditures for