Briefing Supp
INTERNAL AUDIT BRIEFING PRESENTED TO THE PORT OF SEATTLE AUDIT COMMITTEE AND MR. TED FICK, CEO JOYCE KIRANGI, CPA, CGMA DIRECTOR, INTERNAL AUDIT TUESDAY, OCTOBER 21, 2014 AGENDA INTERNAL AUDIT Audit Report 1. Lease and Concession Audits Anton Airfood (dba Anthony's at Sea-Tac) 2. Operational Audits Central Processing System General Ledger Comprehensive Operational Audit/Departmental Audit None Limited Operational Audit Customer Facility Charge (CFC) Compliance 3. Third-Party Audit None Briefing/Update Capital Projects Audit Update 2014 Work Plan Status Update & Risk Assessment for the 2015 Work Plan Proposed Internal Audit 2015 Budget CENTRAL PROCESSING SYSTEM GENERAL LEDGER INTERNAL AUDIT BACKGROUND The General Ledger (G/L) is the core of the PeopleSoft Financial Management System. The PeopleSoft subsystem applications, such as payables and receivables, create and post appropriate journals to the General Ledger. From the G/L, the Port produces monthly detailed and summary accounting information and annual financial reports. The Port has used the PeopleSoft Financial Management System since 1997. The latest upgrade (Version 9.1) was implemented in September 2013. AFR is currently deploying system updates/bundles to all six PeopleSoft Financial modules which also incorporate an upgrade to PeopleTools scheduled to be completed by October 2014. CENTRAL PROCESSING SYSTEM INTERNAL AUDIT GENERAL LEDGER AUDIT OBJECTIVES AND SCOPE The purpose of the audit was to determine whether management controls over the General Ledger are adequate to ensure: Access to the general ledger is proper. Journal entries to the general ledger are proper and accurate. All journal entries are accounted for. We reviewed information for the period January 1, 2013 June 30, 2014. CENTRAL PROCESSING SYSTEM INTERNAL AUDIT GENERAL LEDGER AUDIT RESULT Management controls over the general ledger are adequate to ensure access is proper, entries are proper and accurate, and all journal entries are accounted for. No Reportable Findings. LIMITED OPERATIONAL AUDIT INTERNAL AUDIT CUSTOMER FACILITY CHARGE (CFC) COMPLIANCE BACKGROUND The Customer Facility Charge (CFC) is a user fee paid only by those renting cars at the airport. Rental car companies collect the CFC and remit revenue to the Port. The revenue is used to cover all rental car facility expenses including but not limited to busing operations and debt services. The Port has been collecting the CFC fee since 2006, and the current fee is $6 per day. Fiscal Year Reported Gross Revenue Paid Concession 2010 2011 14,402,658 1,440,303 The Port collects approximately $30 million annually and incurs roughly $26 million in operating and 2011 2012 * 4,995,787 518,657 TOTAL 19,398,445 1,958,960 debt service expenditures. Any excess revenue is accumulated to finance future capital costs. Source: PeopleSoft *Ended 05/16/12 FINANCIAL HIGHLIGHTS (in thousands) 2012 2013 Sources of Funds CFC Collections $30,016 $31,549 Interest Earnings 191 104 Uses of Funds Debt Service 19,689 19,667 Operating Costs 6,146 6,363 Project Expenditures (capital) 17,122 2,512 Ending CFC Fund Balance $12,634 $15,745 Data Source: Aviation Finance & Budget LIMITED OPERATIONAL AUDIT CUSTOMER FACILITY CHARGE (CFC) COMPLIANCE INTERNAL AUDIT AUDIT OBJECTIVES AND SCOPE The purpose of the audit was to determine whether: Management controls over operating costs are adequate to ensure compliance with applicable Revised Code of Washington (RCW) 14.08.120 in the use of the CFC funds. We reviewed information for the period January 1, 2012 July 31, 2014. LIMITED OPERATIONAL AUDIT CUSTOMER FACILITY CHARGE (CFC) COMPLIANCE INTERNAL AUDIT AUDIT RESULT Port management has implemented adequate controls to ensure reasonable compliance with the use of Customer Facility Charge (CFC). No Reportable Findings. BRIEFING/UPDATE INTERNAL AUDIT Capital Projects Audit Update 2014 Work Plan Status Update & Risk Assessment for the 2015 Work Plan Proposed Internal Audit 2015 Budget BRIEFING/UPDATE INTERNAL AUDIT Proposed Internal Audit 2015 Budget Overall Budget Highlights 2013 2014 2015 Amount % Amount % Amount % Salaries/Wages and Benefits 1,167,551 85.81% 1,229,327 86.46% 1,269,748 86.83% Outside Services 128,450 9.44% 129,950 9.14% 124,750 8.53% Travel, Training, and Other Emp Expense 45,550 3.35% 45,139 3.17% 51,479 3.52% Telecommunications 5,820 0.43% 5,880 0.41% 5,520 0.38% General Expense 4,340 0.32% 3,950 0.28% 4,121 0.28% Equipment Expense 5,950 0.44% 4,560 0.32% 3,760 0.26% Supplies/Stock 3,000 0.22% 3,000 0.21% 3,000 0.21% 1,360,661 100.00% 1,421,806 100.00% 1,462,378 100.00% BRIEFING/UPDATE INTERNAL AUDIT Proposed Internal Audit 2015 Budget Additional Items for the 2015 Budget Request Item Committee Management Approval Approval Senior Construction Auditor Pending Discussion Management has preliminarily approved $60,000 with the Committee for consulting services. Request Amount: $102,708 Contracted Services for Subject Pending Discussion Management has preliminarily approved the use Matter Experts (SMEs) with the Committee of the Corp contingency funds for this purpose, as needed. Request Amount: $100,000 ACL Analytics Tool Server Version Pending Discussion Management has preliminarily approved full with the Committee $15,000 Request Amount: $15,000 Peer Review by ALGA Pending Discussion Management has preliminarily approved full with the Committee $15,000 Request Amount: $15,000
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