Overview
Chapter 665 of the Acts of 1945 gave the Commonwealth the right to construct a state pier with storage facilities in Fall River. The Fall River Line Pier, Inc. (FRLP) was chartered as a nonprofit in 1946 to lease a state pier from the Commonwealth to provide receiving, storing, and forwarding of freight and merchandise.
FRLP has been operating as an agent of MassDevelopment1 without a formal contract since its 50-year lease agreement2 with the Commonwealth expired in 2014. FRLP coordinates the day-to-day operations, security, and general maintenance of the Fall River State Pier, located at 1 Water Street in Fall River.
MassDevelopment currently operates and manages the Fall River State Pier and the New Bedford State Pier on behalf of the Department of Conservation and Recreation through an agreement with a December 1, 2017 effective date.
During the audit period, FRLP was overseen by a board of directors consisting of 10 members in 2020, 9 members in 2021, 9 members in 2022, and 8 members in 2023. The board is required to meet annually for the purpose of managing FRLP’s property and business. From July 1, 2020 through April 30, 2021, FRLP employed a general manager to supervise the pier’s daily operations, security, and maintenance personnel members.
Upon the general manager’s retirement in 2021, the FRLP board hired a nonprofit consultant firm, Jobs for Fall River, Inc.3 (referred to throughout this report as the consulting firm), to perform the following duties:
- regarding accounts receivable, processing tenant invoices, depositing tenant payments into FRLP’s bank account, and reconciling bank statements against deposits in QuickBooks;4
- regarding accounts payable, recording payroll, processing billing payments to businesses for goods and services, and reconciling bank statements against expenses in QuickBooks; and
- regarding tenant oversight, generating and reviewing aging reports5 to identify and notify tenants of delinquent accounts.
Currently, FRLP employs a full-time director of operations, who supervises four full-time and three part-time employees who provide security and maintenance/custodial services at FRLP.
Section 26A of Chapter 180 of the General Laws requires nonprofit corporations to file annual reports on or before November 1 with the Secretary of the Commonwealth to maintain their nonprofit status and to remain in good standing.
Accounts Receivable
FRLP provided exterior storage, office space, terminal (warehouse) space, parking, and dockage6 to 22 tenants during the audit period. FRLP is also equipped with a scale to weigh vehicles, incoming cargo, and outgoing cargo. The general public pays at the time of weighing while tenants are billed monthly for their use of the weigh scale. Every two weeks, the member of the consulting firm generates an aging report through QuickBooks that details tenant balances in 30-day increments.
FRLP considers tenant accounts with balances that are outstanding for longer than 90 days to be delinquent. The member of the consulting firm explained that tenants are notified of delinquency with an invoice, at which time they can enter into a payment arrangement.
Expenditures
During the audit period, FRLP reported $2,341,893 in total expenditures. These expenditures included, but were not limited to, employee wages and vendor payments (i.e., office supplies, pier supplies, utilities, property maintenance, property repairs, and professional fees, which include accounting, legal, and consulting firm fees).
The member of the consulting firm enters invoice information into QuickBooks when it is received and prints checks for payment.
Designated board members (in this case, the president or the treasurer) are responsible for reviewing checks to verify vendor names, payment amounts, and mailing addresses against corresponding invoices before signing these checks.
Conflict of Interest
Through inquiries with management, we learned of a Conflict of Interest Policy drafted in 2021. The purpose of this policy is to protect FRLP’s interest when it considers entering into a transaction or arrangement that might benefit the private or financial interests of any director, officer, or board member.
According to FRLP’s Conflict of Interest Policy,
Financial Interest means, when a person has, directly or indirectly, through business, investment, or family:
a. An ownership or investment interest in any entity with which Corporation has a transaction or arrangement;
b. A compensation arrangement with Corporation or with any entity or individual with which Corporation is negotiating a transaction or arrangement.
c. A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which Corporation is negotiating a transaction or arrangement.
d. Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial.
According to the FRLP Conflict of Interest Policy, individuals must disclose the existence of any financial interests in order for the board to discuss whether a conflict of interest exists and to vote on whether the transaction or arrangement is in the best interests of the company. The FRLP Conflict of Interest Policy was never officially adopted by the FRLP board of directors. Our prior audit of FRLP, released on June 11, 2020, recommended the adoption of a conflict of interest policy. See Finding 1 for more information on this matter.
| Date published: | April 16, 2025 |
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