Port of Seattle
2019 Engagement Service Plan
December 9, 2019

Agenda

o  Moss Adams Service Team
o  Services to be Provided & Deliverables
o  Responsibilities (Auditor and Management)
o  Audit Timeline
o  Audit Process
o  Areas of Audit Emphasis
o  Auditing and Accounting Standards Update



2 Port of Seattle 2019 Engagement Service Plan

Your 2019 Audit Service Team Leaders
Team Member                      Responsibilities
Olga A. Darlington,  Olga will serve as the lead client service partner, overseeing all projects we
Assurance Partner  perform for the Port, and addressing any technical questions/issues with
management.
Tammy Erickson,  Tammy will serve as the second reviewer of our reports, serving in the QC
Assurance Partner  role, and will consult on technical issues or key elements of the audits, as
needed.
Tyler Reparuk,  Tyler will oversee the engagement team for all services provided to the
Senior Manager  Port, and will review testing performed by our team during the audits.

Anna Waldren,  Anna will supervise our staff in the field, and manage each of the audits we
Assurance Manager  perform.

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Your 2019 Audit Service Team Leaders
Team Member                      Responsibilities

Maria Braun,  Maria will supervise staff and perform audit procedures related to the
IT Senior Manager  Port's IT systems, including general computing controls testing.

The following individuals will also serve on the Port of Seattle engagement team
o  Caroline Mahalitic, Senior
o  Connor McCauley, Experienced Staff
o  Michael Corrado, Experienced Staff
o  Fiona Deng, Branch Richards & Co., Subcontractor
o  Carmelle Marescot Palomino, Marescot Palomino & Associates, Subcontractor

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Summary of Our Services and Deliverables
Audit and report on financial statements for both the Enterprise Fund and the Warehousemen's
Pension Trust Fund to be included in the Port's Comprehensive Annual Financial Report;
Audit and report on internal control and compliance over financial reporting in accordance with
Government Auditing Standards;
Audit and report on compliance related to Major Federal Award Program(s), the Schedule of
Expenditures of Federal Awards and related internal controls in accordance with the Uniform Grant
Guidance;
Audit and report on the schedule of Passenger Facility Charge (PFC) program receipts and
expenditures, and related internal controls;
Audit and report on the schedule of net revenues available for revenue bond debt service;
Agreed Upon Procedures and report to State of Washington Department of Ecology relating to
Terminal 91 Facility
Agreed Upon Procedures and report to the Environmental Protection Agency relating to Terminal
117 Facility and East Waterway SRI/FS

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Our Responsibility Under U.S. Generally Accepted Auditing
Standards and Government Auditing Standards
1 To express our opinion on whether the consolidated    2 To perform an audit in accordance with generally
financial statements prepared by management with                         accepted auditing standards issued by the AICPA and
your oversight are fairly presented, in all material                              Government Auditing Standards issued by the
Comptroller General of the United States, and design the
respects, and in accordance with U.S. GAAP.
audit to obtain reasonable, rather than absolute,
However, our audit does not relieve you or                                   assurance about whether the consolidated financial
management of your responsibilities.                                        statements are free of material misstatement.
3 To consider internal control over financial reporting     To communicate findings that, in our judgment, are
and internal control over compliance as a basis for                           relevant to your responsibilities in overseeing the
designing audit procedures but not for the purpose                4
financial reporting process and administering federal
of expressing an opinion on its effectiveness or to                             awards. However, we are not required to design
provide assurance concerning such internal control.                         procedures for the purpose of identifying other
matters to communicate to you.



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Audit Timeline
2019                                 2020




AUGUST/           OCTOBER           JANUARY           MARCH/          By APRIL 30          MAY/JUNE
SEPTEMBER                                           APRIL
Performance          Assessment of                                 Final QC            Presentation of
Planning              of interim                 IT               Perform final          reviews, and          the audit results
meetings with              audit              environment          audit fieldwork            finalize                 to Audit
management          procedures         and testing of           for the             auditors'            Committee
and testing of             system                financial                reports
Perform AUP
internal                internal              statements,
Presentation of          procedures as
Audit planning             control                controls             Single Audit
audit results to          required by the
and risk                                                             and PFC
DECEMEBR                                  management        EPA and
assessment
Department of
Entrance
Ecology
meeting with
Committee


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Audit Process - Planning and Risk Assessment
Audit risk involves the risk of material misstatement in the financial statements:
o Inherent risk, control risk and detection risk;

Audit is designed to provide reasonable:
o Not absolute  assurance that the financial statements are free of material misstatements;

Audit scope and approach is determined based upon results of risk assessment




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Audit Process  Testing Procedures


Internal Controls                        Analytical Procedures                 Substantive Procedures

- IT General & Application Controls                    - Revenue and expenses
- Confirm account balances
- Revenue Cycle  Leases, Airlines, Grants            - Accruals
- Vouch to supporting documentation
- Disbursement Cycle                                  - Trends, comparisons, and expectations
- Examine objective evidence
- Payroll Cycle
- Tests of details
- Financial Close & Reporting
- Representations from attorneys and
- Compliance with Federal Awards & PFC Audit                                                                management
Guide



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What is Materiality?

It's calculated using certain quantitative
(total assets) and qualitative factors
It's the amount of a misstatement         =    (covenants, expectations, or industry factors)
that could influence the economic
decisions of users, taken on the
basis of the financial statements.                    It identifies:
1  Significant risk areas
2  Nature, timing, extent, and scope of test
work
3  Findings or misstatements




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Areas of Audit Emphasis

Internal Control Cycles           Management Estimates                     Debt

Accounting for Leases            Revenue Recognition               Capital Assets

Environmental Remediation
Net Position Classification       Pension & OPEB Liabilities
Liability

Northwest Seaport Alliance         Uniform Grant Guidance
Investments
Joint Venture                     (Single Audit)

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Accounting Pronouncements (GASB)  Effective for 2019 Reporting
GASB 83  Certain Asset Retirement Obligations (effective in 2019): Addresses accounting
and financial reporting for certain asset retirement obligations.
GASB 84  Fiduciary Activities (effective in 2019): Establishes the criteria regarding the
identification of fiduciary activities for accounting and financial reporting purposes and how
those activities should be reported.
GASB 88  Certain Disclosures Related to Debt, including Direct Borrowings and Direct
Placements (effective in 2019): Defines debt for purposes of disclosure in notes to financial
statements, and improves the information that is disclosed in notes related to debt, including
direct borrowings and direct placements. It also clarifies which liabilities governments should
include when disclosing information related to debt.


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Accounting Pronouncements (GASB)  Effective after 2019 Reporting
GASB 87  Leases (effective 2020): Addresses the accounting change for the recognition of
certain lease assets and liabilities for leases that were previously classified as operating leases
and recognized as inflows of resources or outflows of resources based on the payment
provisions of the underlying contract.
GASB 89 - Accounting for Interest Cost Incurred before the End of a Construction Period
(effective in 2020): Establishes accounting requirements for interest cost incurred before the
end of a construction period, and requires that interest cost incurred before the end of a
construction period be recognized as an expense in the period in which the cost is incurred.
GASB 91  Conduit Debt Obligation (effective in 2021): Establishes a single method of
reporting for conduit debt obligations and commitments extended by issuers, to improve the
consistency of accounting and financial reporting requirements associated with conduit debt
obligations.


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Communications
What concerns, if any, does the Audit Committee have regarding the audit this year?
Are there any areas that the Audit Committee feel present heightened risk this year?
What expectations does the Audit Committee have for on-going communications from the audit team
prior to the exit conference?






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Questions?
Team Contact Information

Olga A. Darlington, olga.darlington@mossadams.com (425) 551-5712
Tammy Erickson, tammy.erickson@mossadams.com (509) 777-0149
Tyler Reparuk, tyler.reparuk@mossadams.com (206) 302-6431
Anna Waldren, anna.Waldren@mossadams.com (206) 302-6282
Maria Braun, maria.braun@mossadams.com (206) 302-6295



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The material appearing in this presentation is for informational purposes only and should not be
construed as advice of any kind, including, without limitation, legal, accounting, or investment advice.
This information is not intended to create, and receipt does not constitute, a legal relationship, including,
but not limited to, an accountant-client relationship. Although this information may have been prepared
by professionals, it should not be used as a substitute for professional services. If legal, accounting,
investment, or other professional advice is required, the services of a p rofessiona l sh ould be so ught .
Assurance, tax, and consulting offered through Moss Ada ms LLP. I nves tment advisory off ere d throug h
Moss Adams Wealth Advisors LLC. Investment banking offered throu gh Moss Adam  s Capital LLC.






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