Report: N.O. airport had sloppy financial controls

The board that governs Louis Armstrong International Airport operated without proper financial controls for years after Hurricane Katrina, leaving the agency open to waste and fraud, according to a report issued Tuesday by the New Orleans Inspector General’s Office.

The findings aren’t new, and Inspector General Ed Quatrevaux already has acknowledged publicly the New Orleans Aviation Board has largely cleaned up its contracting practices under Aviation Director Iftikhar Ahmad, who arrived in 2010 pledging reform.

But the new report is the most detailed and extensive look yet at the way the board formerly dealt with contracts — practices that may have left the airport, and therefore the city, less attractive to airlines.

Quatrevaux found the board maintained more than 100 contracts with outside vendors on a month-to-month basis, rather than requesting new bids from all interested firms after the original terms expired.

In some cases, he found, the ad hoc arrangement went on for as long as eight years, eliminating the possibility of competition that could have driven down prices.

The report also says no one checked to make sure the labor rates set out in those contracts actually matched what the board was being charged, and in many cases there were discrepancies. The report does not spell out how much extra the board may have paid, but it says at least $2 million worth of invoices contained rates that didn’t match what the board had agreed to pay.

Nor did the board always receive the documentation necessary to prove contractors really did the work they were charging.

“Payments for these contracts were made based solely on the invoice submitted, which provided no detail or synopsis of the work performed,” the report says.

Further, airport staff on at least two occasions paid invoices of more than $15,000 without approval from the board, violating the board’s own policy. One invoice totaled $370,947, another $67,359.

In written comments attached to the report, the aviation board agreed with all of Quatrevaux’s findings but outlined steps it has taken to correct the problems, such as putting contracts out to bid and setting up internal controls to check on labor rates and invoices.

In an April letter to Ahmad, Quatrevaux wrote, “The changes made at Armstrong by you and the Aviation Board produced results beyond expectations.”

He said he board’s own estimate of savings from those moves totaled $25 million, and said, “Too few citizens understand that those savings have a real and substantive impact on the rates we charge the airlines,” rates that make a difference when airlines choose whether or not to provide service to a particular airport and city.