13. E-Z Rent a Car Audit Report

INTERNAL AUDIT REPORT 
Limited Contract Compliance Audit 
E-Z Rent A Car, Incorporated 

June 1, 2016  May 31, 2019 

Issue Date: June 22, 2020 
Report No. 2020-06 




INTERNAL AUDIT

E-Z Rent A Car, LLC 
June 2016  May 2019 
TABLE OF CONTENTS 

Executive Summary ................................................................................................................................................ 3 
Background ............................................................................................................................................................. 4 
Schedule of Findings and Recommendations ....................................................................................................... 6 
Appendix A: Risk Ratings ....................................................................................................................................... 7 















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E-Z Rent A Car, LLC 
June 2016  May 2019 

Executive Summary 
Internal Audit (IA) completed an audit of the Consolidated Rental Car Facility Lease Agreement
(Agreement) between E-Z Rent a Car, Incorporated (E-Z) and the Port of Seattle (Port). 
The Period audited was June 1, 2016 through May 31, 2019. The audit was performed to determine
whether E-Z complied with significant provisions of the Agreement, including whether reported gross
revenues and percentage fees were complete and accurate. 
On Tuesday, May 26, 2020, E-Z filed for chapter 11 bankruptcy protection in U.S. Bankruptcy Court in
Wilmington, Delaware. Chapter 11 allows for "reorganization" of a company's obligations and debts as
overseen by the court. 
Our audit identified the following medium rated issue: 
(Medium) - Internal Audit identified $8,904 in under reported customer facility charges (CFC) and
approximately $7,297 in under reported revenue. As a result, $16,201 is due to the Port. 
The issue is discussed in more detail on page six. 
We extend our appreciation to management and staff of the Aviation Commercial Management
Department  and the Accounting and Financial Reporting Department for their assistance and
cooperation during the audit. 


Glenn Fernandes, CPA 
Director, Internal Audit 






RESPONSIBLE MANAGEMENT TEAM 
Jim Schone, Director, Aviation Business Development 
Geoffrey Foster, Aviation Property Manager 2 

3

E-Z Rent A Car, LLC 
June 2016  May 2019 
Background 
The Port of Seattle (Port) entered into a Consolidated Rental Car Facility Lease Agreement (Agreement)
with E-Z Rent A Car, Incorporated in June of 2010. 
The terms of the Agreement provide for a Minimum Annual Guarantee (MAG) equal to 85% of the total
amount paid to the Port for the previous Agreement Year. Additionally, the Agreement requires a
Percentage Fee equal to 10% of gross revenues, provided the fee is higher than the monthly MAG. The
MAG is payable in advance, on or before the first day of each month. The Percentage Fee, if applicable,
is due on or before the 20th of the following month. 
The Agreement states that the Operator must bill a daily Customer Facility Charge (CFC) of $6 on all
vehicle rental transactions, and remit the full amount to the Port, regardless of whether or not the full
amount is actually collected. The first transaction day provides for a twenty five (25) hour period and
each successive day provides for a twenty four (24) hour period. 
The table below reflects the Gross Revenues, Percentage Fees, and CFC fees: 
Agreement Year               Gross Revenue        Percentage Fees              CFC Fees 
June 2016  May 2017               4,763,858                476,386                649,974 
June 2017  May 2018               3,992,229                399,223                613,536 
June 2018  May 2019               4,286,887                 428,689                 630,060 
Total                                  $13,042,975               $1,304,298                $1,893,570 

Source: E-Z Rent a Car Monthly Revenue Reports, Peoplesoft Financials, AFR YE documents 










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E-Z Rent A Car, LLC 
June 2016  May 2019 
Audit Scope and Methodology 
We conducted the engagement 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 conduct an engagement to obtain sufficient and appropriate evidence to provide
a reasonable basis for our findings and conclusions based on our engagement objectives. We believe
that the evidence obtained provides a reasonable basis for our conclusions based on our engagement
objectives. 
The period audited was June 2016 through May 2019 and included the following procedures: 
Revenue Completeness and Accuracy 
Traced concession payments to Port records to verify payments were received by Agreement
dates. 
Agreed revenue reported to the Port, to the Operator's monthly revenue reports, charge sheets,
and to independently audited schedules. 
Customer Facility Charge 
Using Tableau, tested 100% of transactions, by re-calculating the checkout and return dates to
assess the accuracy of CFC's charged and remitted. 
Agreed Operator's audited CFC counts to daily transaction records. 
Rent Surety Adequacy 
Compared the Surety posted, to the Provisions of the Agreement, Port Procedures (RE-2 Section
E.1.c(2)), and the Revised Code of Washington RCW 53.08.085. 










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E-Z Rent A Car, LLC 
June 2016  May 2019 
Schedule of Findings and Recommendations 
1) Rating: Medium 
Internal  Audit  identified  $8,904  in  under  reported  customer  facility  charges  (CFC)  and
approximately $7,297 in under reported revenue. As a result, $16,201 is due to the Port. 
Customer Facility Charge 
The Agreement requires the Operator to bill a daily CFC of $6 on all vehicle rental transactions, and
remit the full amount to the Port, regardless of whether or not the full amount is actually collected. The
first transaction day provides for a twenty five (25) hour period and each successive day provides for a
twenty four (24) hour period. 
Using data from the operator, we recalculated the CFC by comparing the check out date and time to
the check in date and time. Based on this analysis for the 3-year period under review, we identified
1,484 days or $8,904 of CFC's not collected from the customer, and not remitted to the Port. 
Revenue Completeness 
Section 4.2 of the Agreement requires a Percentage Fee equal to 10% of gross revenues, provided
the fee is higher than the monthly MAG. The MAG is payable in advance, on or before the first day of
each month. The Percentage Fee, if applicable, is due on or before the 20th of the following month. 
We performed a reconciliation of accounts between E-Z's general ledger and the revenue reports
submitted to the Port. The reconciliation identified under reported revenue totaling $48,791.14. The
Percentage Fee due to the Port is 10% or $4,879.11. 
Excluded General Ledger Accounts 
A review of E-Z's chart of accounts identified accounts which should have been included in the
monthly reporting of revenue to the Port. The total value of the excluded accounts for the three-year
period was $24,174.61. The Percentage Fee due to the Port is 10% or $2,417.46. 
Table below reflects the excluded accounts: 
Account Code    Account Description 
4165        EZ Money Credit 
4307        Domestic Security Fee 
4310        Apt. Transport Fee 
4782        Admin-Toll Violation 
4780        Admin-Citation/Tolls 
Recommendation: 
In conjunction with the Port's Legal Department, file a claim, with the appropriate venue, to recover
$16,201 in under reported revenue. 
Management Response/Action Plan: 
Aviation Commercial Management agrees with the audit findings and will work with Port Legal to seek
reimbursement through the bankruptcy process, including relevant late fees and interest charges, to the
extent they are recoverable, whether through the bankruptcy process or through the applicable lease
security instrument. Aviation Commercial Management staff appreciates the Internal Audit staff for their
work during the audit process. 
DUE DATE: 10/01/2020 

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E-Z Rent A Car, LLC 
June 2016  May 2019 
Appendix A: Risk Ratings 
Findings identified during the audit are assigned a risk rating, as outlined in the table below. Only one
of the criteria needs to be met for a finding to be rated High, Medium, or Low. Findings rated Low will be
evaluated and may or may not be reflected in the final report. 
Financial      Internal                                               Commission/
Rating                                   Compliance      Public 
Stewardship  Controls                                         Management 
High probability
Non-compliance
Missing or not                       for external audit   Requires
with Laws, Port
High       Significant     followed                          issues and / or     immediate
Policies, 
negative public     attention 
Contracts 
perception 
Partial              Potential for
Partial controls 
compliance with   external audit
Requires
Medium   Moderate                  Laws, Port       issues and / or
Not functioning                                          attention 
Policies             negative public
effectively 
Contracts          perception 
Functioning as
Low probability
intended but     Mostly complies                       Does not
for external audit
could be        with Laws, Port                       require
Low      Minimal                                    issues and/or
enhanced to     Policies,                            immediate
negative public
improve        Contracts                           attention 
perception 
efficiency 











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