OLYMPIA – A state audit of the Port of Seattle’s construction work accuses the public agency of wasting $97.2 million in taxpayer money, violating state law with a contract related to construction of the third runway at Seattle-Tacoma International Airport, and having a number of other “serious and pervasive issues.”

State Auditor Brian Sonntag said in his report released Thursday that the port needs to do a better job of overseeing contracts and protecting taxpayer dollars from “misuse, abuse and misappropriation.”

While disagreeing with some of the audit’s findings, port CEO Tay Yoshitani said in a written statement that he would take the audit seriously and use it to improve the port’s management of construction and contracting.

“It is disappointing that our own policies and procedures were not followed in some instances,” Yoshitani said. “This is something we will address throughout the organization.”

The report found the port has circumvented public bidding requirements in violation of its own policies and sometimes in violation of state law.

In one instance, port management authorized a contract related to construction of the third runway that was $32.7 million higher than an engineer’s original estimate. That contract violated state law and details of it were concealed from the elected Port Commission, the audit said.

The audit criticized port staff for blocking or delaying access to information or altering documents before releasing them to auditors. Eleven port managers refused to provide signed written statements attesting to the accuracy of the information they provided to the auditors.

Sonntag said he decided to take an in-depth look at the way the port manages construction projects because the port is one of the largest and most complex public agencies in the state and because it has spent more than $500 million on construction and capital projects in each of the past three years.

Washington voters gave the auditor’s office authority to perform independent performance audits when they approved Initiative 900 two years ago.

The performance audit covered all construction projects and related consulting agreements at the port from January 2004 through March 2007, though some of the contracts had started years earlier.

Sonntag said that next year he plans to conduct another performance audit that takes a broader look at port operations beyond construction management. He said auditors would do a review in 2009 to see if the port has addressed the problems identified in this year’s construction audit.

The report makes a total of 51 recommendations Sonntag said would help the port avoid waste.