Port of Seattle 
Report to Audit Committee 
Agenda:                        2015 Audit Results 
Reports Issued 
Areas of Audit Emphasis                        May 9, 2016 
Matters Required to be Communicated 
Upcoming Accounting Pronouncements 
Other Communications 


1

REPORTS ISSUED 
Unmodified opinion on financial statements for the Enterprise Fund and the
Warehousemen's Pension Trust Fund 
Report on the Schedule of Net Revenues Available for Revenue Bond Debt
Service 
Single Audit Reports 
o  Audit and report on internal control and compliance over financial reporting in
accordance with Government Auditing Standards 
One significant deficiency in internal control noted related to a vendor supplied
ancillary operating system; corrective action plan is noted 
o Audit and report on compliance related to the major Federal Award Programs, the
Schedule of Expenditures of Federal Awards and related internal controls 
No findings of noncompliance noted 
Audit and report on the schedule of Passenger Facility Charge (PFC) receipts
and expenditures and related internal controls 
No findings of noncompliance noted 
Agreed Upon Procedures Report for Washington State Department of Ecology 
To be issued in May 2016 
2

AREAS OF AUDIT EMPHASIS 
Internal control environment 
o  Cash receipts/receivables, cash disbursements/payables, payroll, bond and investment
transactions, general computer controls, financial close and reporting, administration
of federal awards 
Management estimates 
o  Environmental remediation liability, legal and insurance contingencies/ recoveries,
depreciation, allowance for doubtful accounts, grant receivables, self insurance
liabilities, actuarial valuations for the Warehousemen's Pension Trust amounts and
disclosures 
Net pension liability (adoption of GASB Statements No. 68 and 71) 
o Resulted in the Port's recognition as an employer to record their share of the liability
for Port employees' future pension obligations as part of the Washington State
Department of Retirement System 
o  Recognition also includes the future pension liability obligation associated with the
Warehouseman's Pension Trust Fund 
o  Adoption resulted in the restatement of 2014 and the 2013 net position and is
appropriately disclosed in Notes 1, 8, and 14 of the financial statements 
3

AREAS OF AUDIT EMPHASIS (CONTINUED) 
Special item 
o Payment to the Washington State Department of Transportation for the Alaskan
Way Viaduct Project for $120 million 
Revenue recognition 
o Operating revenue analysis using business indicators such as landed weight,
enplanements, gate usage, crane movements, and boat counts 
o Ad valorem tax levy, investment income, PFC, CFC, and federal grants 
o Consideration of the collectability of related receivables 
Signatory lease and operating agreement 
o Analysis of revenue requirement by cost center category according to the
agreement including landing fees, terminal rents, gate fees, baggage claim rates,
preferential and common use rates under the SLOA III agreement 
o Revenue sharing and year-end settlement of amounts on an airline by airline basis 

4

AREAS OF AUDIT EMPHASIS (CONTINUED) 
Accounting for leases 
o Airport concessions and fuel system, Seaport, and Real Estate leases 
o Testing of lease terms, payments and appropriate accounting treatment and
disclosures 
Bonds and related accounts 
o Arbitrage liability, capitalized interest, discounts and premiums, debt
repayments, compliance with covenants, and audit of Net Revenues Schedule 
o Alaskan Way Viaduct payment funded from issuance of bonds in March 2015 
Capital assets 
o Consideration of capitalization policies and potential impairment, as well as
testing of additions, retirements, overhead application, capitalized interest,
depreciation 
Unpredictable Procedures 
o Selected three cash receipt revenue streams (STIA Conference Center, STIA
Employee Parking Center and Bell Harbor Conference Center) and reviewed for
processes and controls in place 
5

AREAS OF AUDIT EMPHASIS (CONTINUED) 
Net position 
o Consideration of classification for unrestricted, restricted, and net investment in
capital assets categories 
Stormwater Utility 
o Effective January 1, 2015 for non-aviation properties 
Management's Discussion and Analysis and Notes to Financial Statements 
Two major federal programs tested this year  
Airport Improvement Program $21.5 million 
National Clean Diesel Emissions Reduction Program $1.1 million 



6

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 proposed or passed audit adjustments impacting net
position 
7

REQUIRED COMMUNICATIONS (CONTINUED) 
New accounting pronouncements applied during 2015  GASB Statements
No. 68 and 71 (net pension liability) 
There were no disagreements with management 
Consultation with other independent auditors (none of which we are
aware) 
Difficulties encountered during the audit (none) 
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 and interviews of personnel 
Moss Adams is independent with respect to the Port of Seattle 

8

UPCOMING ACCOUNTING PRONOUNCEMENTS 
GASB 72 Fair Value Measurement and Application (effective in 2016): Addresses
accounting and financial reporting issues related to fair value measurements. We will work
with management to plan for the implementation of this standard. 

GASB 74  Financial Reporting for Postemployment Benefit Plans Other than
Pension Plans (effective in 2017) and GASB 75  Accounting and Financial
Reporting for Postemployment Benefits Other than Pensions (effective in 2018):
Addresses accounting and financial reporting issues related to other postemployment
benefit plans. We will work with management to plan for the implementation of these
standards. 
GASB 78  Pensions Provided through Certain Multiple-Employer Defined Benefit
Pension Plans (effective in 2016): Addresses accounting and financial reporting issues
related to those plans which do not fall under the scope of GASB Statement No. 68, such as
Taft-Hartley (union) plans. We will work with management to plan for the implementation
of this standard. 
Lease Accounting  Exposure draft approved in January 2016. Public comment period is
ongoing and expected issuance set for December 2016.
9

OTHER COMMUNICATIONS 
Weekly 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; all requested
schedules and draft financial statements were received on a timely basis 
All Port personnel across all departments were courteous, responsive and
fulfilled all of our requests in a timely manner 
'Tone at the Top' and attitude from management was one of helpfulness,
candor, and openness in response to audit requests and discussion points 
As planned, Branch Richards & Co. personnel were an integral part of our
audit team. Approximately 7.5% of our audit fee for the financial statement
audit was paid and attributed to this small business firm 
10