Port of Seattle
Report on 2023 Audit Results

                                    Agenda

01 REPORTS ISSUED
02 AREAS OF AUDIT EMPHASIS
03 REQUIRED COMMUNICATIONS
04 OTHER MATTERS
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                Reports Issued

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            Auditor Reports Issued
Auditor Report on Financial Statements    •  Unmodified opinion
for the Enterprise Fund and the
Warehousemen’s Pension Trust Fund      •  Dated April 25, 2024
Report on Internal Control Over            •  No internal control or compliance
Financial Reporting and on Compliance       findings
and Other Matters                        •  Dated April 25, 2024

Report on Compliance for the Major        •  No internal control or compliance
Federal Program and on Internal             findings
Control Over Compliance; Report on
•   The Schedule of Expenditures of
Schedule of Expenditures of Federal
Federal Awards (SEFA) is presented
Awards Required by the Uniform
fairly in all material respects in relation
Guidance (Single Audit)
to the financial statements
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             Other Reports Issued
Audit and report on the schedules of        •  Unmodified opinion
Passenger Facility Charge (PFC)            •  No internal control or compliance
Receipts and Expenditures and related        findings
internal controls
•   Dated April 25, 2024

Report on the Schedule of Net Revenues    •  Unmodified opinion
Available for Revenue Bond Debt          •  Dated April 25, 2024
Service



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    Agreed Upon Procedures Reports Issued
•   Performed in May
Report on Agreed Upon Procedures for
Washington State Department of           •  No exceptions noted
Ecology

•   Performed in May
Report on Agreed Upon Procedures for
Environmental Protection Agency          •  No exceptions noted



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                  Areas of Audit Emphasis

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   Areas of Audit Emphasis
Internal Control Environment
o  IT General Controls                    o  Payroll
o  Capital assets/project management         o  Bond and investment transactions
o  Cash receipts/receivables                o  Administration of federal awards
o  Cash disbursements/payables
Management Estimates
o  Allowance for doubtful accounts           o  Compensated absences
o  Environmental remediation liability         o  Actuarial valuations for pension and other
o  Legal contingencies and insurance            post-employment benefits amounts
recoveries
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   Areas of Audit Emphasis (Cont.)
Northwest Seaport Alliance (NWSA) Joint Venture (JV)
o  Confirmed the Port of Seattle’s share in operating revenue through agreement to NWSA audited
financial statements – As of December 31, 2023, investment in JV was $325 million and income
from JV was $55.8 million
Capital Assets
o  Evaluation of capitalization policies
o  Testing of additions of $503.2 million, retirements, overhead application, and depreciation
o  Testing of timely closing of capital improvement projects into capital assets

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   Areas of Audit Emphasis (Cont.)
Bond Activity
o  No new debt issuances in 2023.
o  Tested debt repayments, arbitrage liability, discounts and premiums, compliance with
covenants, and procedures over information presented in the net revenues schedule
Environmental Remediation Liability
o  Reviewed management’s estimates by performing predictive analysis as well as testing of
processes in place to record the liability. We have selected significant projects to test for
potential liabilities.
o  Confirmed directly with attorneys for potential impact on environmental remediation liability
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   Areas of Audit Emphasis (Cont.)
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, Customer Facility Charges (CFCs), and federal
grants
Airline Lease and Operating Agreements
o  Analysis of revenue requirement by cost center category under the Signatory Lease and
Operating Agreement (SLOA IV) agreement, including landing fees, terminal rents, gate fees,
and baggage claim rates
o  Confirmations of amounts on an airline-by-airline basis
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   Areas of Audit Emphasis (Cont.)
GASB 87 Leases
o  Tested management’s assessment of in-scope leasing arrangements for the Port as a Lessor
and as a Lessee
o  Reviewed significant estimates, Net Present Value (NPV) calculations, and disclosures
o  Selected a sample of lease agreements and reperformed management’s calculations



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   Areas of Audit Emphasis (Cont.)
Adoption of GASB 96 – Software-Based Subscription Assets
o  Tested assets by reviewing agreements and verifying inputs used to calculate the assets,
liabilities, and amortization and verify accurate calculations
o  Reviewed GASB guidance and evaluated disclosures for appropriate application of guidance
o  Overall restatement impact to the Annual Comprehensive Financial Report (ACFR):
o  Reduced other current assets by $860,000
o  Increased Capital Assets by $17,434,000
o  Increased liabilities by $16,083,000
o  Increased net position by $313,000

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   Areas of Audit Emphasis (Cont.)
Fiduciary Activities
o  Consideration of investment balances, plan contributions and distributions for the
Warehousemen’s Pension Trust Fund
Single Audit
o  Total federal awards reported on schedule of expenditures of federal awards – $36.3M
o  Major program – FAA Airport Improvement Program – $36.0M, including COVID Relief funding
of $13.8M

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                 Required
Communications

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              Required Communications and
Government Auditing Standards
Auditor and Management responsibilities for financial statements
under Generally Accepted Auditing Standards:
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.
Our audit is not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control or to identify deficiencies in the design or operation of internal
control. Accordingly, we considered the entity’s internal control solely for the purpose of
determining our audit procedures and not to provide assurance concerning such internal
control.
Our audit does not relieve Port management and the Port Commission of its
responsibilities
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   Required Communications (continued)
Audit was performed according to the planned scope and timing
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)
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

Procedures performed included journal entry testing, third-party
confirmations, and interviews of personnel
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   Required Communications (continued)
There were no uncorrected adjustments identified as part of our
audit procedures
Other Information Included in the Annual Comprehensive Financial
Report:
Management is responsible for the other information included in the Annual Report. The other
information comprises the Introductory information and Statistical information. Our opinion on
the financial statements does not cover the other information, and we do not express an opinion
or any form of assurance thereon.
Our responsibility is to read the other information and consider whether a material inconsistency
exists between the other information and the audited financial statements. We have read the
information, and nothing came to our attention that caused us to believe that such information is
materially inconsistent with the financial statements.
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                Other Matters

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  Accounting Pronouncements
Implemented in 2023:
GASB Statement No. 94, Public-Private and Public-Public
Partnerships and Availability Payment Arrangements
GASB Statement No. 96, Subscription-Based Information
Technology Arrangements
GASB Statement No. 99, Omnibus 2022
GASB Statement No. 100, Accounting Changes and Error
Corrections 
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  Upcoming Accounting
Pronouncements:
GASB Statement No. 101, Compensated
Absences
(effective 2024)
GASB Statement No. 102, Certain Risk
Disclosures
(effective 2025)

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                                                         •   Regular status meetings were held between Moss Adams
and Port management and staff throughout the audit
•   All Port personnel organization wide were responsive and
Acknowledgements      fulfilled all requests in a timely manner
•   ‘Tone at the Top’ and attitude from management was one of
openness in response to audit requests and discussion
points
•   Ryland School Business Consulting and Branch, Richards
& Co. personnel were an integral part of our audit team.
•   Ryland Consulting: 9% of contract fees and 10% of total hours
•   Branch & Richards: 7% of contract fees and 10% of total hours
•   Total sub participation of 16% of contract fees and 20% of
total hours
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Contact Us


+   Olga A. Darlington                   +   Anna Waldren                         +   Connor McCauley

Engagement Partner              Audit Senior Manager              Audit Manager
Olga.Darlington@mossadams.com                      Anna.Waldren@mossadams.com                         Connor.McCauley@mossadams.com
(425) 551-5712                                          (206) 302-6282                                           (206) 302-6793


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   25  Port of Seattle 2023 Audit Results