The Gary/Chicago International Airport Authority collected double reimbursements for its $166 million expansion project during 2012 and ended up refunding $10.38 million to the Northwest Indiana Regional Development Authority because of the errors, according to a State Board of Accounts audit.
The audit covering calendar year 2012 was filed this week. It also points out a failure to follow grant requirements, weakness in internal controls and a failure to have the airport authority approve certain financial statements during the year.
The double reimbursements apparently occurred when a consultant submitted reimbursement requests to the Federal Aviation Administration while the airport finance manager submitted reimbursement requests for many of the same construction projects to the RDA, according to the audit.
The projects for which the airport received double reimbursements involved invoices for the relocation of Canadian National Railroad tracks and the building of the $11.6 million Airport Road vehicle overpass.
Current Airport Finance Manager Carolyn Keith discovered the double-billing after she was hired in November 2012, according to the audit report. Both the RDA and FAA were informed.
The shortcomings in the audit revolved around basically two situations, the double reimbursements and the fact the airport at times had only one person working in its finance office, Keith said Thursday.
Another person has been hired to help with management of airport finances and the situation with the double reimbursements has been taken care of, Keith said.
"I'm the one who reported it, so while I am here it won't happen again," Keith said. "I feel super confident it won't happen again."
The State Board of Accounts audit will be sent to the U.S. Department of Transportation's Office of Inspector General for review, said FAA spokesman Tony Molinaro. The inspector general then will inform the appropriate offices within the FAA if there is anything that requires further review or action.
Once the mistakes were discovered, only the RDA got its money back because it was determined the FAA was the proper funding sources for each project. None of the construction firms or engineering firms involved received double payments.
In some of the cases, the Indiana Department of Transportation and the RDA were the providers of a portion of the double reimbursements. On a separate contract, the city of Chicago under its compact with the Gary airport provided the double reimbursement in tandem with the RDA.
In those cases, it was also determined INDOT and Chicago were the proper fund sources for the projects.
Interim Gary Airport Director B.R. Lane has submitted a corrective action plan to the State Board of Accounts to address the concerns raised in the audit.
Lane was hired at the airport in October, replacing former interim Director Steve Landry, who resigned. In September, the airport authority board was completely replaced under state legislation passed earlier this year.
Contacted Thursday, Landry said he did not think it was appropriate for him to comment on airport business as he no longer works there.
The RDA recently hired Joe Krnich & Associates CPA, of Crown Point, to audit all its projects and the airport expansion will be the first done, said RDA Executive Director Bill Hanna. New protocols have been instituted to make sure the double billing doesn't happen again.
The RDA originally approved $30 million in grant funding for the airport and $13.8 million of that is still available for qualified projects there, Hanna said.
"We continue to work with the new airport board and management to make sure that the runway project is delivered on time in 2014," Hanna stated in an email.