ITEM NO. 7a_Supp DATE OF MEETING 5/24/2011 Audit Recommendations Port Action Status Report Briefing to Port Commission May 24, 2011 • Apr. 2009 SAO started preliminary data gathering • Oct. 2009 SAO presented preliminary observations • Jul. 2010 SAO presented prelim draft audit report • Sep. 2010 SAO presented final Draft Audit Report • Dec. 2010 SAO issued Final Audit Report 10 Recommendations 2 Century Agenda • Complete the Century Agenda as soon as possible Action Status • Century Agenda process described to auditors • • • • • • Century Agenda Committee established on January 4, 2011 Monthly panel discussions held on strategic topics March - September 2011 Commission reviews and approves preliminary goals monthly Staff sets 5-year milestones Final approval of goals/milestones to be complete by December 2011 Final product to be provided to SAO by December 2011 3 Clear Real Estate Management • Clarify Seaport and Real Estate division responsibilities Action Status • Completed • Seaport and Real Estate divisions reviewed all properties, ensured assigned to appropriate division 4 Commission Oversight • Resolution No. 3605 delegated authority; strategic management plan Action Status • Construction management & real estate management, two different functions • Sections 2 & 3 of Res. No. 3605 address real estate • Revisions to Res. No. 3605 to be presented in September 2011 • Updated resolution to be provided to SAO • Seaport and Real Estate divisions reviewed all properties, ensured assigned to appropriate division 5 Acquisitions & Sales • Policy adoption and enforcement Action Status • Current real estate policies RE1 - RE6 • Commission briefed on management of real estate portfolio March 1, 2011 • Century Agenda panel in September 2011 includes real estate policy issues • Section 3 of Res. No. 3605 addresses acquisitions and sales • Resolution No. 3605 to be reviewed in Fall 2011 • Updated resolution to be provided to SAO 6 Real Estate Strategy • Establish strategy for each real estate asset • Document transaction negotiations Action Status • Strategy for real estate assets are reviewed and refined annually as part of the Port's budget process • Assignment of property reviewed - per Recommendation 2 • Procedures developed - per Recommendation 6 7 Rates & Financial Analysis • Establish policies and procedures to ensure market rates and acceptable rate of return Action Status • Completed • Updated real estate procedures prepared • Port already uses industry/widely accepted financial analysis method 8 Leased Cranes • Verify reported crane use, inspect cranes, review maintenance records Action Status • Completed • Established procedure to review & compare use data • Established procedures to enhance crane inspections already being performed and review maintenance records 9 Fishermen's Terminal • Segregation of duties, supervisory oversight, system access control Action Status • Completed • Key control duties segregated • Supervisory review strengthened • System access restrictions enhanced 10 Port Jobs • Authority to contract, contributions to pre-apprenticeship program, clear scope of work, in-kind support Action Status • Completed • State legislation passed in 2010 clarified Port's ability to contract • .20/per hour eliminated from new construction contracts • 2008 and 2010 Port Jobs contracts have been clear on scope of work & in-kind support 11 Loss Reporting • Protocols for reporting losses, level of engagement, monitor compliance, standard loss reporting form Action Status • Completed • Internal audit, Legal, Risk management, ICT, Police and Workplace responsibility collaboration • Reporting & documentation protocols strengthened, will be incorporated in revised Code of Conduct • New standard loss reporting form implemented • Workplace responsibility office to monitor compliance 12 June 14, 2011 • Commission will be asked to approve Port's Action Status Report to SAO July 1, 2011 • Port's final Action Status Report transmitted to SAO 13