Minutes
P.O. Box 1209 Seattle, Washington 98111 www.portseattle.org 206.787.3000 APPROVED MINUTES AUDIT COMMITTEE SPECIAL MEETING MAY 7, 2020 The Port of Seattle Commission Audit Committee met in a special meeting Thursday, May 7, 2020. The meeting was held remotely in accordance with the governor's 'Stay at Home' order and Proclamation 20-28. Committee members present included Commissioner Calkins, Commissioner Bowman, and Christina Gehrke. Also present were Glenn Fernandes, Director, Internal Audit; Dan Chase, Internal Audit Manager; Aaron Pritchard, Commission Issues and Policy Manager; Amy Dressler, Interim Commission Clerk, and Lauren Smith, Deputy Commission Clerk. Call to Order: The committee special meeting was called to order at 1:30 p.m. by Commissioner Calkins. Approval of Audit Committee Meeting Minutes of February 11, 2020: The minutes of the Audit Committee special meeting of February 11, 2020, were approved without objection. External Audit -- Office of the Washington State Auditor Accountability Audit for 2018 The Committee received a presentation from Aron Keleta and Joseph Simmons that contained the following information: The audit covered the Industrial Development Corporation, self-insurance programs, Bell Harbor Marina petty cash, fire department overtime pay, professional services contracts, electronic fund transfers, and employees used for public work projects. The audit results were clean, with a handful of minor exit recommendations. The audit for 2019 will commence in September. Updates and Approvals: The committee received a presentation from Glenn Fernandes that included the following information: The required annual communications regarding the Internal Audit department's independence, quality assurance, and follow-up procedures were delivered. The status of the 2020 Audit Plan was summarized. Some items are behind due to pandemic-related complications. Internal Audit researched potential Federal Emergency Management Agency (FEMA) reimbursable expenditures and provided a report. FEMA will reimburse certain expenses including emergency operation center costs, disinfection of public facilities, and medical sheltering. Audit Committee Minutes of May 7, 2020, submitted for review on September 18, 2020, and proposed for approval on September 24, 2020. PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES Page 2 of 3 THURSDAY, MAY 7, 2020 In response to a December request from Commissioner Calkins, Internal Audit performed an Interlocal Agreement Mapping and Risk Ranking project and provided a list which will be used to develop the 2021 audit plan. Operational Audit Cash Controls: The Committee received a presentation from Glenn Fernandes and management response from Kenneth Lyles and Jim Peterson that included the following information: This audit looked at cash receipts at Fishermen's Terminal, Shilshole Bay Marina, and airport Lost and Found. It was determined that cash processes at Fishermen's Terminal and Shilshole Bay did not have adequate segregation of duties. o Key control enhancements were recommended. o Management implemented several measures to increase cash control. It was found that airport Lost and Found staff did not follow established procedures for handling cash. It was recommended that the Aviation Customer Service Team and the vendor (Hallmark) establish a process to monitor compliance with cash handling procedures. Operational Audit Equipment Acquisition, Monitoring and Disposal: The Committee received a presentation from Glenn Fernandes and management response from Randy Krause and Laurel Dunphy that included the following information: This audit was conducted to follow up on a hotline complaint regarding the misappropriation of equipment, and to assess internal controls over asset management. It was determined that any disposal of Port assets that did not follow AC-13 were of minimal value. While small opportunities for improvement were identified, it was concluded that most of the concerns raised were without merit. . Operational Audit Service Tunnel Renewal/Replacement Project: The Committee received a presentation from Glenn Fernandes that included the following information: This audit was conducted to assess the quality of the port's monitoring of this project to ensure project management standards are being met. No issues were noted. Information Technology Audit Conducted in Non-public Session Limited Contract Compliance Audit McDonald's USA, LLC: The Committee received a presentation from Glenn Fernandes and management response from Jim Schone and Dawn Hunter that included the following information: This audit was conducted to ensure that McDonald's complied with the provisions of the Lease and Concession agreement. One minor issue was reported, regarding non-product sales that were billed incorrectly by the Port. Audit Committee Minutes of May 7, 2020, submitted for review on September 18, 2020, and proposed for approval on September 24, 2020. PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES Page 3 of 3 THURSDAY, MAY 7, 2020 Adjournment: There being no further business, the special meeting was adjourned 3:07 p.m. Prepared: Attest: Amy Dressler, Interim Commission Clerk Ryan Calkins, Audit Committee Chair Minutes approved: September 24, 2020 Audit Committee Minutes of May 7, 2020, submitted for review on September 18, 2020, and proposed for approval on September 24, 2020.
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