Item 3. Moss Adams Presentation
Port of Seattle 2018 Engagement Service Plan December 7, 2018 Agenda Moss Adams Service Team Leaders Services to be Provided Responsibilities (Auditor / Management) Phases and Timing of the Audit 2 Our Audit Approach Areas of Audit Emphasis Auditing and Accounting Standards Update Your 2017 Audit Service Team Leaders Team Member Responsibilities Olga A. Darlington, Olga will serve as the lead client service partner, overseeing all Partner projects we perform for the Port, and performing overall engagement review function. Tammy Erickson, Tammy will serve as the second reviewer of our reports, Partner serving in the QC role, and will consult on technical issues or 3 key elements of the audits, as needed. Tyler Reparuk, Tyler will oversee the engagement team for all services Senior Manager provided to the Port, and will review testing performed by out team during the audits. Lisa Dion, Lisa will supervise our staff in the field, and manage each of the Senior Manager audits we perform. Your 2017 Audit Service Team Leaders Team Member Responsibilities Kimberly Koch, Kim will lead our audit procedures covering the Port's IT Consulting Information Technology (IT) systems, including general computer Partner controls. Kevin Villanueva, A Qualified Security Assessor, Kevin will serve as an additional IT Consulting reviewer of our IT procedures and will oversee testing procedures Director 4 related to IT security and related issues. Maria Braun, Maria will supervise staff and perform audit procedures related to IT Consulting the Port's IT systems, including general computing controls Manager testing. Your 2018 Audit Service Team o The following individuals will also serve on the Port of Seattle Engagement Team: Anna Waldren, Senior Cassie Johnson, Senior Jade Carson, Experienced Staff 5 Connor McCaule, Staff Fiona Deng, Branch Richards & Co; Subcontractor, Experienced Staff Summary of Our Services o Audit and report on financial statements for both the Enterprise Fund and the Warehousemen's Pension Trust Fund to be included in the Port's Comprehensive Annual Financial Report; o Audit and report on internal control and compliance over financial reporting in accordance with Government Auditing Standards; o Audit and report on compliance related to Major Federal Award Program(s), the Schedule of Expenditures of Federal Awards and related internal controls in accordance with the 6 Uniform Grant Guidance; o Audit and report on the schedule of Passenger Facility Charge (PFC) program receipts and expenditures, and related internal controls; o Audit and report on the schedule of net revenues available for revenue bond debt service; o Agreed Upon Procedures and report to State of Washington Department of Ecology relating to Terminal 91 Facility; Our Responsibilities Audit GAAS & GAGAS Read Other Information 7 Report Non-Compliance (Single Audit) Express Opinion / Issue Reports Communicate Audit Committee Communicate Management Management's Responsibilities Prepare Accurate FS Internal Controls 8 Compliance Report Fraud Make Available Representation Letter Audit Timeline Planning & Risk Testing of Internal Testing of IT Substantive Audit Reporting & Assessment Controls Controls Procedures Communications January 2019 April - May 2019 Final review of audit work, report September/ issuance, and presentation of 9 October audit results to management and 2018 Audit Committee September 2018 March- April 2019 Final fieldwork procedures for Financial Statement and Single Audit Planning and Risk Assessment o Audit risk involves the risk of material misstatement in the financial statements: Inherent risk, control risk and detection risk; o Audit is designed to provide reasonable: Not absolute assurance that the financial statements are free of material misstatements; o Audit scope and approach is determined based upon results of risk assessment; 10 Evaluation of Internal Controls o Evaluate components of internal controls o Significant Accounts and Processes considered IT Controls Billings and accounts receivable, leases, capital assets and projects, procurement, cash disbursements, payroll, debt, treasury, environmental remediation liability and contingencies, other revenues, financial close and reporting o IT Systems 11 Application controls General computing controls o Administration of federal awards (Single Audit) Includes tests of compliance Substantive Audit Procedures o Tests of Details Directed testing and audit sampling Random and judgmental sampling methods are used Compliance with requirements of the major federal awards and PFC program o Analytical Procedures 12 Comparison of current and prior year results, and actual to budgeted amounts Analysis of detailed changes within certain accounts such as capital assets, long term debt and investments Predictive analytics for income statement accounts, based upon history, data independent of accounting department, and industry expectations Holistic review of overall financial statements Areas of Audit Emphasis Internal Control Management Bond Accounts Cycles Estimates Accounting for Revenue Capital Assets Leases Recognition 13 Environmental Net Position Pension & OPEB Remediation Classification Liabilities Liability Northwest Seaport Uniform Grant Investments Alliance Joint Guidance (Single Venture Audit) Accounting Pronouncements (GASB) Effective for 2018 reporting GASB 75 - Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions: Addresses accounting and financial reporting issues related to other postemployment benefit plans. GASB 82 Pension Issues amendment of GASB Statements No. 67, No. 68, and No. 73: Addresses accounting and financial reporting clarifications related to issues identified in statements Nos. 67, 68, and 73. GASB 85 Omnibus 2017: Addresses practice issues that have been identified during 14 implementation and application of certain GASB Statements. We will work with management to plan for the implementation of this standard. GASB. 86 - Certain Debt Extinguishment Issues: Improves consistency in accounting and financial reporting for in-substance defeasance of debt by providing guidance for transactions in which cash and other monetary assets acquired with only existing resourcesresources other than the proceeds of refunding debtare placed in an irrevocable trust for the sole purpose of extinguishing debt. Accounting Pronouncements (GASB) Effective for 2019 reporting GASB 83 Certain Asset Retirement Obligations (effective in 2019): Addresses accounting and financial reporting for certain asset retirement obligations. We will work with management to plan for the implementation of this standard. GASB 84 Fiduciary Activities (effective in 2019): Addresses the improvement of guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. We will work with management to plan for the implementation of this standard. 15 GASB 88 - Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements (effective in 2019): Improves the information that is disclosed in notes to financial statements related to debt, including direct borrowings and direct placements. GASB 90 - Majority Equity Interestsan amendment of GASB Statements No. 14 and No. 61 (effective in 2019): Improves the consistency and comparability of reporting a government's majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. Accounting Pronouncements (GASB) Effective for 2020 reporting GASB 87 Leases (effective 2020): Addresses the accounting change for the recognition of certain lease assets and liabilities for leases that were previously classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the underlying contract. We will work with management to plan for the implementation of this standard. GASB 89 - Accounting for Interest Cost Incurred before the End of a Construction Period (effective in 2020): Establishes accounting requirements for interest cost incurred before the end of a construction period, and requires that interest cost incurred before the end of a construction 16 period be recognized as an expense in the period in which the cost is incurred. We will work with management to plan for the implementation of this standard. Questions? Contact Information: Olga A. Darlington, [email protected] 425.551.5712 17 Tammy Erickson, [email protected] 509.777.0149 Tyler Reparuk, [email protected] 206.302.6431 Lisa Dion, [email protected] 206.302.6734 Kim Koch, [email protected] 509.777.0107 Kevin Villanueva, [email protected] 206.302.6542 Maria Braun, [email protected] 206.302.6295 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 nor 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 professional should be sought. 18 Assurance, tax, and consulting offered through Moss Adams LLP. Wealth management offered through Moss Adams Wealth Advisors LLC. Investment banking offered through Moss Adams Capital LLC.
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