The state Office of the Inspector General released findings Thursday that the Steamship Authority wasted millions of public dollars attempting to redo its website.
CAI's Gilda Geist spoke with Massachusetts Inspector General Jeffrey Shapiro to help break down what's in the 59-page report his office put together.
Gilda Geist The Steamship Authority has been relying on the same reservations system since 1996. There's only one person who knows how to work with it, and he's a retired man living in Wisconsin. How did the Steamship Authority's continued use of this nearly obsolete reservations system contribute to the issues that came up during the website project?
Jeffrey Shapiro I think what it shows is that those in leadership, whether it's the administration or the board, they misjudged from the very beginning. It was the wrong project at the wrong time. In 2018, the Steamship Authority was required after a very bad season to do a stem-to-stern review of operations and what went wrong. And in that 2018 report, it most clearly identified that an area of high risk was the reservations system. So, how they pivoted to working on the website as priority number one, I think is the most fundamental question about how this whole fiasco, disaster played out, and everything emanates from there.
GG Can you explain how public funds were involved in this whole process?
JS A public agency that is spending money has an obligation to spend it wisely and appropriately and thoughtfully. The revenue that they earn from the business that they operate under the laws of the Commonwealth of Massachusetts are public dollars. Those dollars, though they earned them, it is no different and they should have the same amount of respect and a fiduciary duty to the public good and to the public trust as if it came from anywhere else. If the music stopped today, $2.3 million was either wasted or mismanaged from this project. It's debatable if the project that has been shelved can ever come back to life. If it isn't, that $2.3 million will go to $4.1 million, and it may go on beyond that.
GG Can you point to some of the key points of failure over the five-year process of this website project?
JS I think the first piece of this was the selection of the website [as the priority]. I think that they thought of this as a communications, marketing, face-of-the-agency kind of piece. And while that's part of it, the reservations system—which is the behind-the-scenes, more robust IT engine—should have been the first piece of it. They did not put an IT person, they put a communications [and] marketing person in charge of a project that was really an IT project. And it's not about that person because this person, I feel badly, they were destined to fail. That person, when they were asked questions by the consultants or the architects that were doing the work, they didn't often know the right answers. So, they gave an answer, and sometimes those were wrong answers that resulted in delays. I think another piece was that the person managing this project, they had a full-time job. Any place that does a big, huge IT project, you bring in a project manager. On the board side, the board didn't ask hard questions. Other times, the general manager gave half answers. We would certainly argue that in a complicated project like this that was already on a bad path, anything that was substantive, as the governing leaders of the agency who hired the general manger, they actually had an obligation to know the full detail of what was going wrong.
GG What recommendations do you and your team have for the Steamship Authority going forward?
JS I'm cautiously optimistic about the future for the Steamship Authority and I base a lot of that on the fact that their incoming general manager brings great value and great experience. I am, however, cautioned by the fact the board also created a very sweetheart outgoing arrangement with the current general manager who is going to transition into this senior advisor arrangement. That goes for 18 months, compensates him at a very high level, and then delineates seven responsibilities that he's going to be in charge of. And of those seven, our report documents that three of them he's not very good at. So that's troubling, if he's going to be responsible on a daily basis for the $5.7 million reservations system that's underway, or to conclude the Woods Hole Terminal Project, which is in great delay and great cost overruns.
GG Anything else in particular you really wanted to add?
JS The only thing I wanted to add is that in 1985, the Commonwealth's very first inspector general, IG [Joseph R.] Barresi, wrote a report about the Steamship Authority. It's eerily similar to our report. "The failure to properly manage major decisions can seriously impair the Authority's future ability to provide service to the public, and adequate management, supervision, and oversight was totally missing. And when that is the case, waste is almost inevitable." That's from the 1985 report. I could have written that, and that would fit seamlessly into this report. Something needs to happen with how this board and how this governance works in a way that's meaningful.
The Steamship Authority says it is still reviewing the report and cannot comment further at this time.
