Port of Seattle
Report to Audit Committee
2019 Audit Results

June 11, 2020

Agenda
Reports Issued
Areas of Audit Emphasis
Matters Required to be Communicated
Upcoming Accounting Pronouncements
Other Communications




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Reports Issued
Unmodified opinion on financial statements for the Enterprise Fund and the
Fiduciary Fund, which includes 
Warehousemen's Pension Trust Fund,
401(a) Supplemental Savings Plan,
401(a) Police Retirement Plan, and
401(a) Fire Fighters Retirement Plan
Single Audit Reports
o Audit and report on internal control and compliance over financial reporting in accordance
with Government Auditing Standards
No findings of noncompliance 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
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Reports Issued (continued)
Audit and report on the schedule of Passenger Facility Charge (PFC)
receipts and expenditures and related internal controls
No findings of noncompliance noted
Report on the Schedule of Net Revenues Available for Revenue Bond Debt
Service

Report on Agreed Upon Procedures for Washington State Department of
Ecology

Report on Agreed Upon Procedures for Environmental Protection Agency

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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;
Management estimates
o  Environmental remediation liability, legal contingencies and insurance recoveries, depreciation,
allowance for doubtful accounts, grant receivables, actuarial valuations pension and OPEB
amounts;
Northwest Seaport Alliance joint venture
o  Confirmed the Port of Seattle's share in operating revenue through confirmation with component
auditor and agreement to NWSA audited financial statements;
Capital assets
o Consideration of capitalization policies, testing of additions, retirements, overhead application,
capitalized interest, depreciation; consideration of impairment and asset retirement obligations

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Areas of Audit Emphasis (continued)
Airline lease and operating agreement
o Analysis of revenue requirement by cost center category under the SLOA IV agreement,
including landing fees, terminal rents, gate fees, and baggage claim rates;
o Confirmations of amounts on an airline by airline basis;
Bond activity
o Tested the issuance in August 2019 of $457 million of intermediate lien revenue bonds;
o Debt repayments, arbitrage liability, capitalized interest, discounts and premiums, compliance
with covenants, and procedures over information presented in the net revenues schedule;
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, CFC, and federal grants;
o Consideration of the collectability of related receivables;

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Areas of Audit Emphasis (continued)
Fiduciary activities
o Consideration of investment balances, plan contributions and distributions for 401(a) type
plans administered by ICMA, and for the Warehousemen's Pension Trust Fund;

Net position
o Consideration of classification for appropriate
categories

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 - $9.2M
o Major program  FAA Airport Improvement Program - $5.4M
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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 was one adjustment identified and passed by management related to
reclassification of completed project cost from CIP to capital assets in the amount of
$12.4M, and related depreciation expense in the amount of $250K.
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Required Communications (continued)
New accounting pronouncements implemented in 2019
o  GASB Statement No. 83, Certain Asset Retirement Obligations
o  GASB Statement No. 84, Fiduciary Activities
o  GASB Statement No. 88, Certain Disclosure Related to Debt
There were no disagreements with management or difficulties encountered during the audit
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, vendor analysis, and interviews of
personnel

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Upcoming Accounting Pronouncements
GASB 87  Leases (effective in 2022, as deferred by GASB 95*): Addresses recognition of
certain lease assets and liabilities for leases that previously were classified as operating leases.
GASB 89  Accounting for Interest Cost Incurred Before the End of a Construction Period
(effective in 2021, as deferred by GASB 95*): Requires that interest costs incurred before the
end of a construction period be expensed as incurred. As a result, interest costs will not be
included in the historical cost of capital assets. This standard has been implemented effective
January 1, 2020.
GASB 91  Conduit Debt Obligations (effective in 2021, as deferred by GASB 95*): Provides
clarifying definition of conduit debt obligations, establishes that it is not a liability of an issuer, and
provides accounting guidance and additional note disclosures.
* GASB 95 - Postponement of the Effective Dates of Certain Authoritative Guidance: was issued
on May 8, 2020. The standard provides temporary relief in light of the COVID-19 pandemic. That
objective is accomplished by postponing the effective dates of certain pronouncements by one year.
We will work with management to plan for the implementation of these standards.

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Other Communications
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; partially in a remote work environment.
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, and openness in
response to audit requests and discussion points;
As planned, Branch Richards & Co. personnel and Marescot Palomino & Associates PLLC
personnel were an integral part of our audit team. Approximately 13% of our audit fee for the audit
was paid and attributed to these small business firms;

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The material appearing in this presentation is for informational purposes only and should not be
construed as advice of any kind, including, without limitation, legal, accounting, or investment advice.
This information is not intended to create, and receipt does not constitute, a legal relationship, including,
but not limited to, an accountant-client relationship. Although this information may have been prepared
by professionals, it should not be used as a substitute for professional services. If legal, accounting,
investment, or other professional advice is required, the services of a p rofessiona l sh ould be so ught .
Assurance, tax, and consulting offered through Moss Ada ms LLP. I nves tment advisory off ere d throug h
Moss Adams Wealth Advisors LLC. Investment banking offered throu gh Moss Adam  s Capital LLC.






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