Internal Audit Report 

Lease and Concession Audit 
ATZ, Inc. 
dba Doug Fox Parking 

October 1, 2009  May 31, 2012 




Issue Date: September 11, 2012 
Report No. 2012-16

Internal Audit Report 
ATZ, Inc. (dba Doug Fox Parking) 
October 1, 2009, through May 31, 2012 

Table of Contents 

Transmittal Letter ..................................................................................................................... 3 
Executive Summary .................................................................................................................. 4 
Background .............................................................................................................................. 5 
Conclusion ................................................................................................................................ 6 
Schedule of Findings and Recommendations ........................................................................ 7 
1. Untimely Reporting of Online Reservation Deposits .................................................. 7 












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Internal Audit Report 
ATZ, Inc. (dba Doug Fox Parking) 
October 1, 2009, through May 31, 2012 

Transmittal Letter 

Audit Committee 
Port of Seattle 
Seattle, Washington 

We have completed an audit of ATZ, Inc. (dba Doug Fox Parking) for the period from October 1,
2009, through May 31, 2012. 
We conducted this audit in accordance with generally accepted government auditing standards.
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. 
Doug Fox Parking materially complied with the terms of the Lease and Concession agreement. 
We extend our appreciation to the management and staff of Aviation Business Development and
Accounting and Financial Reporting for their assistance and cooperation during the audit. 


Joyce Kirangi, CPA 
Internal Audit, Director 







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Internal Audit Report 
ATZ, Inc. (dba Doug Fox Parking) 
October 1, 2009, through May 31, 2012 
Executive Summary 

Audit Scope and Objective The purpose of the audit was to determine whether: 
1) The reported concession fees were complete, properly calculated, and                        remitted timely to the 
Port. 
2) The annual report is accurate, complete and timely. 
We examined the books and records of Doug Fox Parking for aperiod of thirty-two months from 
October 1, 2009, through May 31, 2012.

Agreement Terms  The lease and concession agreement is for a period of two years with an option
of one 1-year extension at the Port's sole discretion. The concession under the agreement is tiered
based on gross receipts, ranging from 54.5% to 75%. 
For the audit period, the agreement generated for the Port approximately $2.2 million annually in
concession revenues. 

Audit Result Summary  Doug Fox Parkingcomplied with the annual reporting requirements. The 
reported concession to the Port was materially complete, properly calculated, and timely paid. We;
however, identified a minor variance where Doug Fox Parking did not timely reported forfeited 
customer deposits (no-show) as part of concession parking receipts. The exception is discussed in
the Schedule of Findings and Recommendations. 








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Internal Audit Report 
ATZ, Inc. (dba Doug Fox Parking) 
October 1, 2009, through May 31, 2012 
Background 
Doug Fox Parking operates a parking lot located on S. 170th Street under a lease and concession 
agreement. The agreement was for a period oftwo years with an option of one 1-year extension at 
the Port's sole discretion. Dough Fox Parking has operated the lot for five years prior to                the current 
agreement. 
Aviation Business Development, in conjunction with Accounting and Financial Reporting, has the 
primary responsibility for administering and monitoring the agreement                               to ensure compliance with
agreed-upon terms. 

The terms of the agreement provide for tiered percentage fees based on gross parking and ancillary
services (e.g., car wash) receipts as follows: 
Gross Receipts      Concession Rate 
Up to $4,800,000               54.5% 
$4,800,000 to $5,250,000          70% 
Parking Gross Receipts 
$5,250,000 to $6,600,000         72% 
over $6,600,000               75% 
Ancillary Services
All                     15% 
Receipts 
The following are agreed-upon deductions in the agreement: 
a.   Refunds allowed by lessee 
b.   Discounts actually granted 
c.   Sales tax or other excise tax imposed by the taxing body 
d.   The amount of any rent attributable to a sublease 
The percentage fee is due on or before the 15th of each month for the preceding month. For untimely
payments, the agreement provides for a one-time late fee of 5% of the overdue amount and interest
to be accrued at the rate of 18% per year from the due date until paid. 

Below are the financial highlights for the last two agreement years: 
Fiscal       Reported          Paid 
Year     Gross Revenue    Concession 
2009  2010      $4,229,662     $2,343,446 
2010 - 2011       3,964,106      2,160,192 

Audit Scope and Methodology 
We conducted the audit to determine whether the lessee was in compliance with the lease agreement
terms including, but not limited to, proper concession payments. We utilized a risk-based audit
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Internal Audit Report 
ATZ, Inc. (dba Doug Fox Parking) 
October 1, 2009, through May 31, 2012 
approach from planning to test sampling. We gathered  information through document requests,
interviews, observation and analytical reviews in order to obtain a complete understanding of the 
financial requirements of the agreement. We applied additional detailed audit procedures to areas 
with the highest likelihood of significant negative impact as follows: 
Timely Payment 
Annual Financial Report 
Concession Revenue 
a)  Timely Payment 
We reviewed the entire payment records for the audit period to determine whether the lessee
made timely payments as stipulated in the agreement. 
b)  Annual Report 
We reviewed annual reports to determine compliance with the timely and complete submission of
the report. 
c)  Concession Revenue 
We interviewed Doug Fox Parking personnel about policies, procedures, and internal control over
cash receipts, accounting, and reporting. 
To determine whether the lessee completely reported all concession revenues, we performed the
following: 
Reconciled the reported concession to the lessee's accounting records as well as to state
excise tax returns to ensure completeness. 
Tested a sample of 22 batches of parking transactions from Dec. 2009, July 2010, Feb.
2011, Apr. 2011, May 2011, August 2011, and Sept. 2011. The batches were reconciled to
bank statements to ensure complete and accurate report of concession parking revenues. 
Analyzed and reconciled detailed parking transactions to the reported concession. 

Conclusion 
Doug Fox Parking complied with the annual reporting requirements. The reported concession to the
Port was materially complete, properly calculated, and timely paid. We; however, identified a minor
variance where Doug Fox Parking did not timely reported forfeited customer deposits (no-show) as
part of concession parking receipts. The exception is discussed in the Schedule of Findings and
Recommendations. 


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Internal Audit Report 
ATZ, Inc. (dba Doug Fox Parking) 
October 1, 2009, through May 31, 2012 

Schedule of Findings and Recommendations 

1.  Untimely Reporting of Online Reservation Deposits 
Gross Receipts as defined in the lease agreement under Section 1.11.1 include                                       deposits not
refunded to customers. 
Doug Fox Parking offers online reservation services with a $10 deposit. At exit, the deposit is
applied as part of payment. The deposits from no-show customers are properly accounted for as a
liability until such a time when they can be reasonably assumed to have been forfeited. 
We noted that the reservation deposit account balance as of August 20, 2012 was $42,516 with the
following aging schedule: 
Aging Period     Amount 
Up to 9 months     $17,652.01 
9 to 18 months      16,329.66 
Over 18 months      8,535.13 
Total            $42,516.80 

Deposits older than nine months are considered stale and should have been reported as part of
parking gross receipts as follows: 
Percentage
Aging Period     Amount     Percentage 
Fee 
9 to 18 months     $16,329.66               $8,899.66 
Over 18 months      8,535.13    54.5%        4,651.65 
Total            $24,864.79                $13,551.31 

Recommendations: 
We recommend management: 
Seek $13,551 in concession fee resulting from forfeited customer deposits. 
Work with Doug Fox Parking to ensure that all parking gross receipts are timely reported. 

Management Response 
Management will pursue collection of the monies owed. 

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