DATE:   December 10, 2020 
TO:     Commissioner Ryan Calkins 
Commissioner Stephanie Bowman 

FROM: Rudy Caluza, Director, Accounting & Financial Reporting (AFR) 
Dan Thomas, Chief Financial Officer 

SUBJECT: External Audit Services Contract Extension for the Port's 2021 Financial Period 
ACTION REQUESTED 
Request Commission Audit Committee authorization for the Executive Director to proceed and
request approval from the Port Commission to extend the current External Audit Services Contract
one additional year through May 2022. 
EXECUTIVE SUMMARY 
This request to extend the contract is to defer for one year the issuance of a Request for Proposal
to establish a new 5-year audit services contract. The purpose is to avoid the challenges involved
with on-boarding new auditors and initial year audit coordination during a mandatory stay safe 
work-remote environment, should a new Certified Public Accounting firm be selected. The
timeline for recovery toward full on-site operation remains unpredictable given the up-spike and
continued life/health risk exposures caused by the pandemic we are facing. Port policy currently
requires all non-essential Port employees to work remotely from home through June, 2021. This
proactive step also mitigates creating any risk of impacting timely completion the legally mandated
audits. 

DETAILS 
The current external audit services contract (P-00318441) covers the financial periods 2016
through 2020 with $2,195,000 for the full contract term. The base contract is for one year with
four, one-year renewal options. Annual independent audits are required for the financial statements
of the Port's Enterprise Fund and the Fiduciary Fund for purposes of obtaining an independent
auditor's opinion as to the fairness in presentation of the financial results and position. Independent
audits are also required for the Port's administration of Federal grants and Passenger Facility

Commission Audit Committee 
External Audit Services Contract Extension for the Port's 2021 Financial Period 
____________________________________________________________________ 

Charge (PFC) revenues in accordance with applicable regulations. These audits are covered under
the existing external audit services contract. This contract is due to expire in May 2021 once the
audit services for the 2020 financial period are completed. 
The annual external audit services include the following deliverables: 
Independent Audit and Opinion  Financial Statements of the Port's Enterprise Fund 
Independent Audit and Opinion  Financial Statements of the Port's Fiduciary Fund 
Independent Audit and Opinion  Net Revenues Available for Revenue Bond Debt Service 
"Single Audit"(Federal grants regulatory compliance) and Report of Federal Grants
Awarded 
Passenger Facility Charge (PFC) Program Audit and Report 
Agreed Upon Procedures Report for Washington State Department of Ecology 
Agreed Upon Procedures Report for Environmental Protection Agency 
Based on a typical timeline, Port staff would normally initiate a request to the Commission to
authorize a new external audit services procurement in Q3/Q4 2020, in anticipation of the
expiration of the current contract in May 2021. However, the COVID-19 pandemic crisis resulted
in considerable business volatility and uncertainty, and poses continues unprecedented life/health
risks. Various business processes needed to adjust accordingly and swiftly, and the Port followed
the Washington State's mandate from on-site to remotework. At the same time, external audits
were interrupted and the auditors are also adapting to performing audits remotely. Members of the
Port's procurement team, AFR, and divisional finance & budget find it prudent to pause to initiate
the procurement until more safe and stable business conditions return. There are several reasons
to support not changing auditors during the pandemic: such as changes in the internal control
environment; changes in the business environment due to disruptions of the airline, cruise, and real
estate industry; and the need to address competing priorities of Port's staff resources in a remotework
environment. These all create challenges in both performing and supporting external audits.
External auditors will undoubtedly face different audit risks, need to adapt to their client's new
post-pandemic internal control/business environment, and develop alternative audit procedures,
which may extend well into 2021. 
In light of the current economic and business uncertainty, the prudent approach is for the Port to
initiate the external audit procurement in Q3 of 2021 at earliest. The basis and scope of the RFPs
will remain the same. Postponing the RFP will allow prospective audit firms to adequately prepare
for the proposals and the Port team to focus on the procurement without also having to address the
operational logistics and orchestration woes during the pandemic. 
FINANCIAL IMPLICATIONS 
For the 2020 financial period under audit, Moss Adams provided the Port with a $20,000 cost
reduction in consideration of the financial challenges that the Port is facing in the midst of the
pandemic. For the 2021 financial period to be covered under this requested contract extension,
Moss Adams indicated a willingness to forgo the contractual annual fee increase and reduce audit
fees again, resulting in a continued $20,000 reduction in audit costs. The funding of $450,000 will
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Commission Audit Committee 
External Audit Services Contract Extension for the Port's 2021 Financial Period 
____________________________________________________________________ 

cover external audit services for the Port's 2021 financial period. The fee for the 2021 audit
services, which is conducted during the second half of 2021 and the first half of 2022, is included
in the AFR department's 2021 proposed budget and will be included in the 2022 AFR proposed 
budget accordingly. The funding sources are approximately split 55% and 45% in operating and
nonoperating expenses, respectively. 















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