Presentation to the
Port of Seattle
Audit Committee

Results of 2009 Audit
June 8, 2010


1

Reports Issued
Report on financial statements
Unqualified opinion on the financial statements
Opinion covers separate statements of the Enterprise Fund and the
Warehousemen's Pension Trust Fund
No material weaknesses noted
Dated April 28, 2010
Audit and report on Schedule of Net Revenues Available for Revenue Bond Debt
Service
Unqualified opinion
Report dated the same date as financial statement opinion
Audit and report on Schedule of Passenger Facility Charges (PFC's), receipts and
expenditures and related internal controls
No findings of non-compliance; no material weaknesses noted
Reports dated the same date as financial statement opinion
Reports delivered on May 14, 2010
Audit and report on Federal Financial Assistance Programs and related internal
controls and compliance in accordance with Federal OMB Circular A-133 (Single
Audit)
No findings of non-compliance; no material weaknesses noted
Reports dated the same date as financial statement opinion
Reports delivered in May; data collection form was submitted on May 28, 2010

2

Areas of Audit Effort
Internal control environment
Understand and test the design and implementation of key controls
surrounding all significant financial statement accounts and business
processes
Understand and test the design and implementation of controls over
compliance requirements
Assess information technology general controls and application controls
Test sample transactions of the capital assets related systems, payroll, cash
disbursements and procurement systems, and leases
Treasury and investment, debt, cash, budget, third party transactions,
environmental liability, and financial close and reporting cycles tested
through observations, inquiries and walkthroughs of each system
Management estimates
Environmental and pollution remediation obligation accruals, legal and
insurance reserves, capitalized interest, depreciation, allowance for
doubtful accounts, grant receivables, arbitrage liabilities, actuarial
valuations for OPEB liability and for the Warehousemen Pension Trust
amounts and disclosures

3

Areas of Audit Effort - continued
Revenue recognition
Operating revenue analysis using business indicators such as landed
weight, enplanements, gate usage, crane movements, and boat counts
Ad valorem tax levy, investment income, PFC, and federal grants
Consideration of the collectability of related receivables
Signatory lease and operating agreement
Revenue requirements for landing fees and terminal rents according to
the agreement
Cost elements - debt service allocation and operating and maintenance
expense
Accounting for leases
Airport concessions and fuel system, Seaport, and Real Estate leases
Testing of lease terms, payments and appropriate accounting treatment
and disclosures


4

Areas of Audit Effort - continued
Bonds and related accounts
Arbitrage liability, capitalized interest, discounts and premiums, new
debt issuance, debt repayments, and compliance with covenants
Capital assets
Consideration of capitalization policies and potential impairment as well
as testing of additions, retirements, overhead application, capitalized
interest, depreciation, Eastside Rail Corridor transaction
Net assets
Consideration of classification for unrestricted, restricted, and invested
in capital assets, net of related debt
Warehousemen's Pension Trust Fund
Separate materiality and procedures


5

Areas of Audit Effort - continued
Administration of federal awards and related administrative
controls and compliance
Total federal expenditures $78.6 million
Three major programs
Airport Improvement Program - $60.2 million
TSA Memorandum of Agreement - $12.9 million
Port Security Grant - $3.0 million
Tested major programs for compliance with OMB-Circular A-133 and
grant specific requirements
Passenger Facility Charge (PFC) Program Audit
Schedules of Passenger Facility Charge Program Receipts and
Expenditures
Tested internal controls and compliance with PFC requirements


6

Required Communications
Audit adjustment posted relating to the reversal of capitalized interest on an
intangible asset
All significant audit issues and new accounting pronouncements were addressed
early in the audit process
Weekly meetings were held between Moss Adams and Port management and staff
throughout the audit term
The audits progressed on time and in an orderly fashion
All Port personnel were courteous, responsive and fulfilled all of our requests in a
timely manner
No disagreements with management
We encountered no difficulties in performing the audit
Moss Adams is independent of the Port of Seattle
As planned, Branch Richards & Co. personnel were an integral part of our audit
team. Approximately 300 audit hours were contributed by this MWDBE firm
Letter to Audit Committee in accordance with audit standards provided under
separate cover

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