Report 06 Ground Transport
INTERNAL AUDIT REPORT Ground Transportation at Seattle-Tacoma International Airport Comprehensive Operational Audit January 1, 2013 December 31, 2014 ISSUE DATE: MAY 7, 2015 REPORT NO. 2015-06 Ground Transportation at Sea-Tac International Airport INTERNAL AUDIT January 1, 2013 December 31, 2014 TABLE OF CONTENTS TRANSMITTAL LETTER.................................................................................................................................................. 3 EXECUTIVE SUMMARY ................................................................................................................................................. 4 BACKGROUND ............................................................................................................................................................... 5 FINANCIAL HIGHLIGHTS .............................................................................................................................................. 5 HIGHLIGHTS AND ACCOMPLISHMENTS ..................................................................................................................... 5 AUDIT SCOPE AND METHODOLOGY ............................................................................................................................ 5 CONCLUSION ................................................................................................................................................................ 5 2 Ground Transportation at Sea-Tac International Airport INTERNAL AUDIT January 1, 2013 December 31, 2014 TRANSMITTAL LETTER Audit Committee Port of Seattle Seattle, Washington We have completed an audit of the Ground Transportation Department at Seattle-Tacoma International Airport. We reviewed information for the period January 1, 2013 December 31, 2014. We conducted this performance audit in accordance with Generally Accepted Government Auditing Standards and the International Standards for the Professional Practice of Internal Auditing. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. We extend our appreciation to the management and staff of the Ground Transportation Department for their assistance and cooperation during the audit. Joyce Kirangi, CPA, CGMA Internal Audit, Director AUDIT TEAM RESPONSIBLE MANAGEMENT TEAM Jack Hutchinson, Manager Jeff Hoevet, Senior Manager, Landside Operations Brian Nancekivell, Senior Auditor Vicky Ausbun, Manager, Landside Operations 3 Ground Transportation at Sea-Tac International Airport INTERNAL AUDIT January 1, 2013 December 31, 2014 EXECUTIVE SUMMARY AUDIT OBJECTIVES AND SCOPE The purpose of the audit was to determine whether management controls are adequate to ensure that: All applicable tariffs are accurately and completely recorded, Concession revenues are accurately and completely recorded. We reviewed information for the period January 1, 2013 December 31, 2014. Details of our audit's scope and methodology are on page 6. BACKGROUND The Ground Transportation Department at Seattle-Tacoma International Airport is a department of 15+ FTEs. The Department is responsible for managing a variety of ground transportation operators consisting of taxis, limousines, courtesy vehicles, airporters, charter buses, shuttle buses, crew vans and parcel carriers. In 2014, there were some 2.4 million outbound trips from the airport to various destinations. The Department processed over $8 million in transportation fees (non-aeronautical revenue) in 2014. AUDIT RESULT The Ground Transportation Department has adequate controls to ensure all applicable tariffs and concession revenues are accurately and completely recorded. 4 Ground Transportation at Sea-Tac International Airport INTERNAL AUDIT January 1, 2013 December 31, 2014 BACKGROUND The purpose of the Ground Transportation Department (GT) at Seattle-Tacoma International Airport is to promote high quality, safe, and convenient ground transportation services for the traveling public. The Department has 15+ FTEs, and manages over 2 million outbound trips each year, with taxis and courtesy vehicles accounting for 90% of the trips. Ground Transportation generated $8.3 million in airport transportation fees in 2014. Airport transportation fees are non-aeronautical revenue for the airport. All GT activities are monitored by ten controllers. They oversee the operations of the upper drive, lower drive, commercial lanes on the third floor of the parking garage, cell phone lots, and airport roadways. The controllers are responsible for inspecting taxies and limos, as well as monitoring commercial vehicles that utilize the airport. The inspections ensure that all vehicle operators follow state, county, and Port of Seattle regulations. From the Ground Transportation Center (GTC), the controllers dispatch limos and charter buses. They also assist phone-in and walk-up customers. The GTC is located in the center of the third floor of the parking garage. Transportation fees are generated as follows: 1) On-call taxis and on-call limousines are under concession agreements with Minimum Annual Guarantees (MAG), payable monthly. 2) Courtesy vans, airporters, door-to-door operators (shuttle buses), and crew vans are invoiced monthly based on pertrip fees. An automated vehicle identification system monitors and records each trip into Gatekeeper. 3) Charter buses are invoiced monthly based on dispatch logs. 4) Bell-in taxis, pre-arranged limos, and parcel carriers purchase annual permits. FINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS Department Revenues - 2014 Actual Type Revenue Charge Method Taxi - Yellow Cab $3,637,214 Concession agreement Courtesy cars/vans; crew vans 2,437,657 Per trip On-call limos 943,112 Concession agreement Pre-arranged limos 513,583 Annual permit Shared ride vans 227,108 Per trip Charter buses 179,261 Per trip Airporters 108,646 Per trip Belled-in taxis 56,212 Annual permit Parcel carriers 21,538 Annual permit Other 172,951 TOTAL $ 8,297,282 Data Source: PeopleSoft Financials 5 Ground Transportation at Sea-Tac International Airport INTERNAL AUDIT January 1, 2013 December 31, 2014 HIGHLIGHTS AND ACCOMPLISHMENTS During the course of the audit, we observed the following effective and efficient management practices: Per-trip numbers by company for courtesy vehicles, the largest provider of trips, are automatically uploaded to PeopleSoft, increasing billing efficiency and reducing the risk of input errors. AUDIT SCOPE AND METHODOLOGY We reviewed information for the period January 1, 2013 December 31, 2014. We utilized a risk-based approach from planning to testing. We gathered information through research, interviews, observations, and data analysis, in order to obtain a complete understanding of the Department operations. We assessed significant risks and identified controls to mitigate those risks. We evaluated whether the controls were functioning as intended. We applied additional detailed audit procedures to areas with the highest likelihood of significant negative impact as follows: 1. To ensure all applicable tariffs are accurately and completely recorded: We tested a sample of three months for each year (2013 and 2014). We validated the pertrip fees by operator type for courtesy vehicles, airporters, and charter buses. We validated the per-trip fees by operator type and verified the number of trips billed in the accounting records. We checked the accuracy and completeness of total charges. We tested the accuracy and completeness of permits by operator type. For pre-arranged limos, we reconciled permits issued to the accounting records for six months of each year (2013 and 2014), which accounted for over 60% of applicable revenue. For belled-in taxis and parcel carriers, we reconciled 100% of permits issued for both years to the accounting records. We reviewed the violations log to ensure all violations were accounted for. 2. To ensure that concession revenues are accurately and completely recorded: We tested all concession payments (some $9 million) within the audit period and verified the accuracy, completeness, and timeliness of concession payments. We verified that any additional trip fees for the concession year for the Seattle-Tacoma International Limousine Association (STILA) agreement were appropriately paid. CONCLUSION CONCLUSION The Ground Transportation Department has adequate controls to ensure all applicable tariffs and concession revenues are accurately and completely recorded. 6
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