The Queen Mary, the jewel of Long Beach’s waterfront, has faced some tough challenges in recent years — and still needs several crucial repairs. So the city auditor is set to investigate the ship’s finances and the lease that governs its operator.
City Auditor Laura Doud announced Tuesday, Dec. 3, that her office will partner with a forensics accounting firm to ensure that Urban Commons, which manages the city-owned ship, is up-to-date on its payments to Long Beach in accordance with the Queen Mary’s lease agreement.
The management firm, for its part, said it will be happy to cooperate.
“Urban Commons looks forward to working with the city on the recently announced audit,” the company’s principal Taylor Woods said in a statement, “which is expected and normal, and to continuing with our successful partnership for years to come.”
Doud said the audit is just the latest move to ensure the ship is run transparently.
“Since I was first elected to this office, I have tracked the Queen Mary’s developments, voiced my concerns about the progress of capital improvements as well as city oversight of the ship, pushed for reporting transparency, and conducted a number of audits of the Queen Mary,” Doud said in a statement. “This latest audit is a continuation of our work to ensure good stewardship of this historical asset.”
This audit will be the sixth investigation into the Queen Mary that Doud has undertaken since she was first elected in 2006.
The first audit, in 2008, recommended the city develop asset-management policies for third-party contractors, as well as conduct a full inventory of the ship.
Successive audits — in 2009, 2010 and 2011 — comprised a three-phase dive into the ship’s capital improvements. The first found that the Queen Mary’s operator at the time, Save the Queen, completed “significantly less” in the capital improvements plan than they were obligated to. Some of the improvements that were made, Doud found, “deviated from the agreed-to capital plan without management approval.”
In the 2010 audit, Doud noted that after Save the Queen requested an extension for some of the improvements mentioned in the 2009 report, the firm made “significant progress” in meeting its obligations.
The 2011 report finally found that Save the Queen had met all of its obligations. Doud noted the city “would like to commend STQ for their efforts.”
But the most recent audit, conducted in 2012, began due to a call to the city’s fraud hotline that alleged improper accounting or the possible diversion of revenue by Save the Queen.
Doud did not find outright wrongdoing. But she did note several systems that could be adjusted so the city could maintain better oversight over the Queen Mary and its finances.
Major changes have been made with the ship’s management — and its physical condition has worsened — since that last audit.
A 2015 marine survey found that the historic vessel could face some internal structural collapse due to years of neglect, unless major action was taken.
The following year, Long Beach selected a new operator — Urban Commons — to take over a 66-year lease and complete much of the urgent repair work.
But some of those repairs have cost millions more than originally estimated. The ship, meanwhile, has continued to languish, according to a third-party inspector.
Urban Commons and the city have continued working together to keep the Queen Mary above water, and Long Beach officials appear confident in the firm’s stewardship.
“Since taking over the lease of the Queen Mary in 2016, we have made significant capital investments into the repair and operation of the ship,” Woods said Tuesday, “and are excited about the recent advancements and enhancements to the financial picture we have created to protect the legacy and future of the Queen Mary.”
But Doud, for her part, is still keeping a watchful eye over that relationship.
“The iconic Queen Mary has for generations been a significant and meaningful part of our city’s history,” she said, “but the ship has gone through some very challenging times.”