Port of Seattle
Report to Audit Committee
2020 Audit Results


1 Port of Seattle 2020 Audit Results

Agenda
Reports Issued
Areas of Audit Emphasis
Internal Control Matters
Matters Required to be Communicated to
the Audit Committee
Upcoming Accounting Pronouncements
Other Communications



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Reports Issued
Unmodified opinion on financial statements for the Enterprise Fund and the
Warehousemen's Pension Trust Fund

Single Audit Reports
o Audit and report on internal control and compliance over financial reporting in accordance
with Government Auditing Standards
No findings of noncompliance noted

o Audit and report on compliance related to the major federal award program, the schedule
of expenditures of federal awards and related internal controls
No findings of noncompliance noted


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Reports Issued (continued)
Audit and report on the schedule of Passenger Facility Charge (PFC) receipts and
expenditures and related internal controls
No findings of noncompliance noted
Report on the Schedule of Net Revenues Available for Revenue Bond Debt Service

Report on Agreed Upon Procedures for Washington State Department of Ecology

Report on Agreed Upon Procedures for Environmental Protection Agency


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Areas of Audit Emphasis
Internal control environment
o  Capital assets/project management, cash receipts/receivables, cash disbursements/payables, payroll,
bond and investment transactions, and administration of federal awards
Management estimates
o  Allowance for doubtful accounts, environmental remediation liability, legal contingencies and insurance
recoveries, compensated absences, actuarial valuations for pension and OPEB amounts
Northwest Seaport Alliance joint venture
o  Confirmed the Port of Seattle's share in operating revenue through confirmation with component auditor
and agreement to NWSA audited financial statements
Rent Deferral Payment Plan
o  Obtained an understanding of the Port's Deferral Payment Plan and methodology for tracking and
recording the deferrals
o  Selected a sample of tenants and obtained the signed deferral agreement and reviewed invoicing and
payment support for adherence to deferral payment plan

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Areas of Audit Emphasis (continued)
Capital assets
o  Consideration of capitalization policies, testing of additions, retirements, overhead application, and
depreciation; consideration of timely closing of CIP projects
Bond activity
o  Tested the three partial defeased bonds during 2020 which were defeased using proceeds from the sale
of commercial paper
o  Debt repayments, arbitrage liability, discounts and premiums, compliance with covenants, and
procedures over information presented in the net revenues schedule
Airline lease and operating agreement
o  Analysis of revenue requirement by cost center category under the SLOA IV agreement, including
landing fees, terminal rents, gate fees, and baggage claim rates
o  Confirmations of amounts on an airline-by-airline basis
Fiduciary activities
o  Consideration of investment balances, plan contributions and distributions for the Warehousemen's
Pension Trust Fund
o  Restatement of 2019 and 2018 reporting for 401(a) plans as a result of updated guidance
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Areas of Audit Emphasis (continued)
Revenue recognition
o  Operating revenue analysis using business indicators such as landed weight, enplanements, gate usage,
and boat counts
o  Ad valorem tax levy, investment income, PFC, CFC, and federal grants
o  Consideration of the collectability of related receivables
Information technology
o  General Computer Controls
o  Some internal control recommendations were noted and provided to management

One major federal program identified and tested current year 
o  Total federal awards reported on schedule of expenditures of federal awards - $163.7M
o  Major program  FAA Airport Improvement Program - $161.5M, including CARES Act funding of $147.1M

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Internal Control Matter
Background:
In April 2020, prior to issuance of the auditor's report on the 2019 financial statements, Port project
management staff identified several errors in classification of capital assets totaling approximately $12M. The
errors related to portions of capital projects that were completed and placed in service during 2019, but not
timely reported to central accounting.
In January 2021, Port staff identified additional projects that were completed during 2019 but were not timely
communicated to be closed in the accounting system, resulting in additional asset classification errors. Total
errors of $31.2M were corrected in the 2020 financial statements for projects that should have been closed and
started depreciating in 2019.
Recommendation:
Additional review and monitoring controls should be incorporated over construction project activity to ensure
that projects that meet the criteria for capitalization are timely reported to central accounting to allow their
timely closing and classification to capital assets and for start of depreciation. These reviews should include
enhanced coordination between divisional capital project management and project managers, divisional
finance and central accounting to ensure timely updates to financial records for assets placed in service
throughout the year.
Management response: Management provided a response that included corrective action.
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Required Communications
Auditor and Management responsibilities for financial statements under Generally
Accepted Auditing Standards
o  To form and express an opinion about whether the financial statements are fairly presented; to plan
and perform the audit in accordance with generally accepted auditing standards and Government
Auditing Standards
o  Our audit does not relieve Port management and the Port Commission of its responsibilities
Audit was performed according to the planned scope
Significant accounting policies are summarized in Note 1 to the financial statements
Financial statement disclosures were consistent, clear and understandable
Representations were requested and received from management
There were no disagreements with management or difficulties encountered during the
audit
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Required Communications (continued)
There was one uncorrected audit adjustment identified
o  The separate fiduciary fund financial statements for the Warehousemen's Pension Trust for the year
ended December 31, 2020 omits a payment that should have been made to a beneficiary. The Port is
seeking an explanation from the third-party administrator. The resulting effect is an uncorrected
misstatement related to $20,856 of unrecorded retirement benefit payments and a corresponding
benefits payable to one beneficiary. The effect is immaterial to the fiduciary fund financial statements
taken as a whole
Consultation with other independent auditors (none of which we are aware)
Illegal acts (none noted)
Ability to continue as a going concern (no disclosure necessary)
Consideration of fraud in a financial statement audit
o  Procedures performed included journal entry testing, deferred payment plan analysis, and interviews
of personnel

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Required Communications (continued)
New accounting pronouncements implemented in 2020
o  GASB Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction
Period
o  GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance
o  GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting
for Internal Revenue Code Section 457 Deferred Compensation Plans





11 Port of Seattle 2020 Audit Results

Upcoming Accounting Pronouncements
GASB 87  Leases (effective in 2022): Addresses recognition of certain lease assets and
liabilities for leases that previously were classified as operating leases.
GASB 91  Conduit Debt Obligations (effective in 2021): Provides clarifying definition of
conduit debt obligations, establishes that it is not a liability of an issuer, and provides
accounting guidance and additional note disclosures.
We will work with management to plan for the implementation of these standards.




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Other Communications
Regular status meetings were held between Moss Adams and Port management and staff
throughout the audit term
Technical 'whitepapers' were received from Port management throughout the year
The audits progressed on time and in an orderly fashion, fully in a remote work environment
All Port personnel across all departments were courteous, responsive and fulfilled all our
requests in a timely manner
'Tone at the Top' and attitude from management was one of helpfulness, and openness in
response to audit requests and discussion points
As planned, Branch Richards & Co. personnel and Marescot Palomino & Associates PLLC
personnel were an integral part of our audit team, contributing 345 staff hours to the audit.
Over 12% of our audit fee for the audit was paid and attributed to these small business firms.

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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 rofession al sh ould be so ught .
Assurance, tax, and consulting offered through Moss Ada ms LLP. Inves tment advisor y off ere d throug h
Moss Adams Wealth Advisors LLC. Investment banking offered throu gh Moss Adam  s Capital LLC.






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