Port of Seattle
Report on 2022 Audit Results

    Agenda
• Reports Issued
• Areas of Audit Emphasis
• Internal Control Matters
• Matters Required to be Communicated to
the Audit Committee
• Upcoming Accounting Pronouncements
• Other Communications



2 Port of Seattle 2022 Audit Results

                        Auditor Reports Issued
Auditor Report on Financial Statements for     •   Unmodified opinion
the Enterprise Fund and the
Warehousemen’s Pension Trust Fund          •  Dated April 28, 2023

Report on Internal Control Over Financial      •   No internal control or compliance findings
Reporting and on Compliance and Other
Matters                                    •  Dated April 28, 2023

•    No internal control or compliance findings
Report on Compliance for the Major            •   The Schedule of Expenditures of Federal
Federal Program and on Internal Control           Awards (SEFA) is presented fairly in all
Over Compliance; Report on Schedule of           material respects in relation to the financial
Expenditures of Federal Awards Required          statements
by the Uniform Guidance (Single Audit)        •   One Major Program – Airport Improvement
Program with $174 million in federal funds
received (of which $149.4 million in COVID-
19 funding).
3 Port of Seattle 2022 Audit Results

                   Auditor Reports Issued (continued)
•   Audit and report on the schedule of
Passenger Facility Charge (PFC) receipts
and expenditures and related internal
controls
•   Report on the Schedule of Net Revenues
Available for Revenue Bond Debt Service

•   Report on Agreed Upon Procedures for
Washington State Department of Ecology
(to be completed in May)

•   Report on Agreed Upon Procedures for
Environmental Protection Agency (to be
completed in May)
4 Port of Seattle 2022 Audit Results

                       Areas of Audit Emphasis
•    Internal control environment
o  Capital assets/project management, cash receipts/receivables, cash disbursements/payables,
payroll, bond and investment transactions, and administration of federal awards with focus on
COVID-19 funding
•    Management estimates
o  Allowance for doubtful accounts, environmental remediation liability, legal contingencies and
insurance recoveries, compensated absences, actuarial valuations for pension and other postemployment
benefits amounts
•    Northwest Seaport Alliance (NWSA) joint venture
o  Confirmed the Port of Seattle’s share in operating revenue through agreement to NWSA audited
financial statements
•    Capital assets
o  Consideration of capitalization policies, testing of additions, retirements, overhead application, and
depreciation; consideration of timely closing of capital improvement projects

5 Port of Seattle 2022 Audit Results

                   Areas of Audit Emphasis (continued)
•    Bond activity
o  Tested the five new bond issuances and four refunding bonds during 2022.
o  Debt repayments, arbitrage liability, discounts and premiums, compliance with covenants, and
procedures over information presented in the net revenues schedule
•    Airline lease and operating agreement
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
•    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
o  Consideration of the collectability of related receivables

6 Port of Seattle 2022 Audit Results

                   Areas of Audit Emphasis (continued)
•    Adoption of GASB 87
o  Tested management’s assessment of in-scope leasing arrangements for the Port as a Lessor and as a
Lessee
o  Reviewed significant estimates, NPV calculations, and disclosures
o  Selected a sample of lease agreements and reperformed management’s calculations
o  Tested restated results for the years ended December 31, 2020 and 2021
o  Overall restatement impact to the ACFR:
o   Added lease receivables of $345M
o   Added deferred inflows from leasing of $345M
o   Added intangible leased assets of $8.5M and accumulated amortization of $3.8M
o   Added lease liabilities of $4.7M
o   Decrease of $11M and $12M of operating revenues in FY20 and FY21, respectively


7 Port of Seattle 2022 Audit Results

                   Areas of Audit Emphasis (continued)
•    Fiduciary activities
o  Consideration of investment balances, plan contributions and distributions for the Warehousemen’s
Pension Trust Fund
•    Information technology
o  General Computer Controls
•    One major federal program identified and tested current year –
o  Total federal awards reported on schedule of expenditures of federal awards – $175.4M
o  Major program – FAA Airport Improvement Program – $174.3M including COVID Relief funding of
$149.4M



8 Port of Seattle 2022 Audit Results

                    Required Communications
•    Auditor and Management responsibilities for financial statements under Generally
Accepted Auditing Standards
o  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
o  Our audit does not relieve Port management and the Port Commission of its responsibilities
•    Audit was performed according to the planned scope
•    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
9 Port of Seattle 2022 Audit Results

                 Required Communications (continued)
•    There were no uncorrected audit
adjustments identified
•    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
o  Procedures performed included journal entry
testing, deferred payment plan analysis, and
interviews of personnel

10 Port of Seattle 2022 Audit Results

            New & Upcoming Accounting Pronouncements
•    New accounting pronouncements implemented in 2022
o  GASB 87 – Leases: Addresses recognition of certain lease assets and liabilities for leases that previously were
classified as operating leases.
o  GASB Statement No. 91, Conduit Debt Obligations
o  GASB Statement No. 92, Omnibus 2020 GASB Statement
o  GASB Statement No. 93, Replacement of Interbank Offered Rates
•    Upcoming accounting pronouncements
o  GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements
(effective 2023)
o  GASB Statement No. 96, Subscription-Based Information Technology Arrangements (effective 2023)
o  GASB Statement No. 99, Omnibus 2022 (effective 2023)
o  GASB Statement No. 100, Accounting Changes and Error Corrections (effective 2024)
o  GASB Statement No. 101, Compensated Absences (effective 2024)
We have been working with management to plan for the implementation of these standards.

11 Port of Seattle 2022 Audit Results

                       Acknowledgements
•     Regular status meetings were held between Moss Adams
and Port management and staff throughout the audit term
•     Technical ‘whitepapers’ were received from Port
management throughout the year
•     The audits progressed on time and in an orderly fashion,
fully in a remote work environment
•     All Port personnel organization wide were responsive and
fulfilled all our 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
•     As planned, Branch Richards & Co. personnel and
Ryland School Business Consulting personnel were an
integral part of our audit team. Over 12% of our audit fee
for the audit was to these small business and minorityowned
firms.
12 Port of Seattle 2022 Audit Results




Contact Us


+   Olga A. Darlington             +   Anna Waldren                   +   Connor McCauley

[email protected]                 [email protected]                    [email protected]
(425) 551-5712                                    (206) 302-6282                                       (206) 302-6793




13  Port of Seattle 2022 Audit Results

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