An audit released this week shows the city lacked processes and systems to properly manage millions of capital improvements at the Long Beach Airport—a problem that has been found in management of other city projects.

The report by PMA Consultants, which was contracted by City Auditor Laura Doud, found numerous inadequacies in the oversight of more than $45 million worth of construction projects that were recently completed or remain underway at the municipal airport. Over the next five years, the airport’s capital improvement plan was more than $105.6 million.

The audit focused on five construction projects that were started, complete, or still underway from Fiscal Year 2016 through Fiscal Year 2019: improvements to Taxiway C, Runway 12-30 rehabilitation, parking structure elevator and entrance improvements, terminal wall beautification and the new TSA check baggage inspection station, which is part of the airport’s more than $110 million Phase II Terminal Improvements project.

LGB is a “self-supporting” enterprise in the city, meaning it does not use local tax dollars.

PMA’s findings include:

• A lack of a clear capital improvement plan prioritization process, which makes it hard for stakeholders—residents and businesses—to know if the right projects are being identified and completed, or how effectively.
• No tracking of changes to the plan, meaning it’s difficult to monitor true project-level performance or progress.
• A need for a project management office, which has been found to lead to more successful projects.
• No documented risk management processes, which greatly increases the likelihood of project budget and schedule overruns.
• Project contingency is not driven by risk, which may result in increased cost and delays.
• The project management information system (PMSI) is not fully configured or used consistently, meaning not all project cost information is one central location, which can result in increased cost due to poor management.
• Standards for cost management and reporting such as monthly expenditure forecasts are not defined, which makes it difficult to effectively control a project’s finances or provide transparency.
• A lack of change order logs making it difficult to manage change proactively and reduce liability and risk on the project.
• The PMSI invoice module is not consistently used, which is important for tracking payments and invoices.
• No quality management policy or plans, which could result in a lack of satisfaction for clients, including airlines, the Federal Aviation Administration or passengers by not meeting their expectations.
• No formal project performance reviews, which increases the chances of poor performance as it relates to budget, schedule and standards.

Long Beach Airport’s procurement process, meanwhile, falls in line with the city’s procedures, which are meant to ensure “fair and open competition,” PMA found. However, the list of recommendations to address the deficiencies are reminiscent of a larger, citywide issue, Doud said.

“Audits over the years have highlighted the ongoing critical need for contract and project management best practices across the city to ensure that public dollars are spent wisely and as they were intended,” Doud said.

The deficiencies seen in the airport project management were consistent with the other audits of projects in park maintenance and oversight of the bonds used to pay for repairs aboard the Queen Mary, Doud said in her report.

The city recently resumed control of the historic ocean liner for the first time in decades after the former master leaseholder, Urban Commons, filed for bankruptcy. Even before the bankruptcy announcement, Doud’s office began an audit to examine Urban Commons’ use of $23 million in bonds for critical repairs.

The investigation into Urban Commons bond usage as well as a 2012 audit of Queen Mary financial activities showed similar oversight and transparency issues as the airport report, Doud said.

The airport and city manager’s office have agreed to and have started implementing the audit recommendations, according to Doud.

“We’ve worked closely with [Doud’s] team to make immediate changes to our construction program that will deliver the greatest value for our travelers and the general public,” airport Director Cynthia Guidry said in a statement.