Exit Conference: Port of Seattle 
The Office of the Washington State Auditor’s vision is increased trust in government. Our mission is to provide
citizens with independent and transparent examinations of how state and local governments use public funds, and
develop strategies that make government more efficient and effective.
The purpose of this meeting is to share the results of your audit and our draft reporting. We value and appreciate
your participation. 
Audit Reports
We will publish the following reports:
   Accountability audit for January 1, 2019 through December 31, 2019 – see draft report.
Audit Highlights
   We appreciate the Port’s commitment to the safeguarding of public funds and developing control
systems that ensure compliance with laws and regulations.
   The Port responded promptly to our requests and provided all documents necessary to complete the
audit in a timely manner.
   We would like to thank Debbi Browning, Rudy Caluza, Glenn Fernandes, Don Kelley and Melanie O’Cain
for participating in weekly status update meetings. It allowed for increased communication and kept the
audit running smoothly. 
   We appreciated Duane Hill, Karin Olmstead, Jenniann Kealin, Ann McClellan Brendalynn Taulelei and
Lisa Drake and their staff for their assistance and timely responses during our payroll work. 
   We would like to highlight Tiffany Burton, Sr. Business Systems Analyst, Aviation Maintenance, for
developing Tableau reports to help Aviation Maintenance improve their time reporting process in the
future.
   Karmeli Cayetano responded to questions about our credit card and travel and expense card work timely.
   We would like to thank Michael Tong, Corporate Budget Director, for his assistance and timely
responses.
   We would like to highlight Lisa Lam and Rudy Caluza for their assistance and timely responses while
reviewing the Port’s Rent deferral payment plans.
Recommendations not included in the Audit Reports
Exit Items
We have provided exit recommendations for management’s consideration. Exit items address control deficiencies
or non-compliance with laws or regulation that have an insignificant or immaterial effect on the entity, or errors
with an immaterial effect on the financial statements. Exit items are not referenced in the audit report.

       Work of Other Auditors 
A financial statement and single audit was performed by Moss Adams LLP of the Port. Professional audit 
standards require us to evaluate relevant work done by other auditors and communicate certain matters to the
governing body.
   We performed procedures to ensure we could rely on the work of the external auditors and reference their
audit in our audit report. These procedures included consideration of attendance at key meetings,
evaluation of the firm’s last peer review report, review of the other auditor’s work, review of the other
auditor’s results and communications with the other auditor.
   We did not become aware of any instance in which the work of the other auditors gave rise to concern
about the quality of their work.
   There were no limitations that restricted our analysis of the other audit(s).
   We did not become aware of any instance in which a material misstatement of the financial statements
has or may have resulted from fraud or suspected fraud. 
Finalizing Your Audit
Report Publication
Audit reports are published on our website and distributed via e-mail in an electronic .pdf file. We also offer a
subscription service that allows you to be notified by email when audit reports are released or posted to our
website. You can sign up for this convenient service at: https://portal.sao.wa.gov/SAOPortal/
Management Representation Letter
We have included a copy of representations received from management.
Audit Cost
At the entrance conference, we estimated the cost of the audit to be $113,000 and actual audit costs will
approximate that amount. 
Your Next Scheduled Audit
Your next audit is scheduled to be conducted in Fall 2021 and will cover the following general areas:
   Accountability for Public Resources
   Review of CPA work papers
The estimated cost for the next audit based on current rates is $113,000 plus travel expenses. This preliminary
estimate is provided as a budgeting tool and not a guarantee of final cost.

Working Together to Improve Government 
Audit Survey
When your report is released you will receive an audit survey from us. We value your opinions on our audit
services and hope you provide feedback.

      Local Government Support Team
This team provides support services to local governments through the Budget, Accounting, and Reporting System
(BARS) and annual online filing technical assistance, provides accounting, reporting and BARS training. Our
website and client portal offers many resources, including a client Help Desk that answers auditing and accounting
questions, updated BARS manuals, access to resources and recorded trainings, and additional accounting and
reporting resources. Additionally this team assists with the online filing of your financial statements.
The Center for Government Innovation
The Center for Government Innovation of the Office of the Washington State Auditor offers services designed to
help you, help the residents you serve at no additional cost to your government. What does this mean? They
provide expert advice in areas like building a Lean culture to help local governments find ways to be more
efficient, effective and transparent.  The Center also provides financial management technical advice and best
practices and resources. These can be accessed from the “Improving Government” tab of our SAO website and
help you act on accounting standard changes, comply with regulations, protect public resources, minimize your
cybersecurity risk and respond to recommendations in your audit. The Center also offers the Financial Intelligence
Tool, better known as FIT, to help you assess and monitor your finances and compare your financial operations
to other local governments like you. You can email the Center for a personal training session to learn all the
benefits using the FIT tool can provide. The Center understands that time is your most precious commodity as a
public servant, and wants to help you do more with the limited hours you have. If you are interested in learning
how the Center can help you maximize your effect in government, call them at (564) 999-0818 or email them at
Center@sao.wa.gov .

Questions?
Please contact us with any questions about information in this document or related audit reports.
Kelly Collins, CPA, Director of Local Audit, (564) 999-0807, Kelly.Collins@sao.wa.gov 
Mark Rapozo, CPA, Assistant Director of Local Audit, (564) 999-0794 Mark.Rapozo@sao.wa.gov 
Joe Simmons, CPA, Program Manager, (206) 615-0555, Joseph.Simmons@sao.wa.gov 
Madeleine “Maddie” Frost-Shaffer, Assistant Audit Manager, Madeleine.Frost-Shaffer@sao.wa.gov 
Angela Funamori, Audit Lead, Angela.Funamori@sao.wa.gov

       Accountability Audit Report
Port of Seattle
For the period January 1, 2019 through December 31, 2019 







Published (Inserted by OS)
Report No. 1027693

                        Office of the Washington State Auditor
Pat McCarthy
Issue Date – (Inserted by OS)

Board of Commissioners
Port of Seattle
Seattle, Washington
Report on Accountability
Thank you for the opportunity to work with you to promote accountability, integrity and openness
in government. The Office of the Washington State Auditor takes seriously our role of providing
state and local governments with assurance and accountability as the independent auditor of public
accounts. In this way, we strive to help government work better, cost less, deliver higher value and
earn greater public trust.
Independent audits provide essential accountability and transparency for Port operations. This
information is valuable to management, the governing body and public stakeholders when
assessing the government’s stewardship of public resources.
Attached is our independent audit report on the Port’s compliance with applicable requirements
and safeguarding of public resources for the areas we examined. We appreciate the opportunity to
work with your staff, and we value your cooperation during the audit.
Sincerely,


Pat McCarthy
State Auditor
Olympia, WA
Americans with Disabilities
In accordance with the Americans with Disabilities Act, we will make this document available in
alternative formats. For more information, please contact our Office at (564) 999-0950, TDD
Relay at (800) 833-6388, or email our webmaster at webmaster@sao.wa.gov .

Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  (564) 999-0950  Pat.McCarthy@sao.wa.gov

                       TABLE OF CONTENTS
Audit Results ................................................................................................................................... 4 
Related Reports ............................................................................................................................... 5 
Information about the Port .............................................................................................................. 6 
About the State Auditor's Office ..................................................................................................... 7 















Office of the Washington State Auditor                                                                                Page 3

                          AUDIT RESULTS
Results in brief
This report describes the overall results and conclusions for the areas we examined. In those
selected areas, Port operations complied, in all material respects, with applicable state laws,
regulations, and its own policies, and provided adequate controls over the safeguarding of public
resources.
The Port reported a matter to us on December 19, 2019 that is currently under investigation.
In keeping with general auditing practices, we do not examine every transaction, activity, policy,
internal control, or area. As a result, no information is provided on the areas that were not
examined.

About the audit
This report contains the results of our independent accountability audit of the Port of Seattle from
January 1, 2019 through December 31, 2019.
Management is responsible for ensuring compliance and adequate safeguarding of public resources
from fraud, loss or abuse. This includes the design, implementation and maintenance of internal
controls relevant to these objectives.
This audit was conducted under the authority of RCW 43.09.260, which requires the Office of the
State Auditor to examine the financial affairs of all local governments. Our audit involved
obtaining evidence about the Port’s use of public resources, compliance with state laws and
regulations and its own policies and procedures, and internal controls over such matters. The
procedures performed were based on our assessment of risks in the areas we examined.
Based on our risk assessment for the year ended December 31, 2019, the areas examined were
those representing the highest risk of fraud, loss, abuse, or noncompliance. We examined the
following areas during this audit period:
   Payroll – overtime and double-time
   Rent deferral payment plans – compliance with state law
   Credit cards – purchase cards and travel and expense cards
   Financial condition


Office of the Washington State Auditor                                                                                Page 4

                       RELATED REPORTS
Financial
A financial statement audit was performed by a firm of certified public accountants. That firm’s
report is available on our website, http://portal.sao.wa.gov/ReportSearch. 

Federal grant programs
A firm of certified public accountants evaluated internal controls and tested compliance with the
federal program requirements, as applicable, for the Port’s major federal programs. That firm’s
report is available on our website, http://portal.sao.wa.gov/ReportSearch. 













Office of the Washington State Auditor                                                                                Page 5

                  INFORMATION ABOUT THE PORT
The Port is a municipal corporation of the State of Washington (the State), organized on
September 5, 1911, under the State statute RCW 53.04.010 et seq. In 1942, the local governments
in  King  County,  Washington  (the  County)  selected  the  Port  to  build  and  operate  the
Seattle-Tacoma International Airport.
Port policies are established by a five-member Commission elected at-large by the voters of the
County for four-year terms. The Commission appoints the Executive Director (ED), who oversees
daily operations of the organization. Through resolutions and directives, the Commission sets
policy for the Port. These policies are then implemented by the ED and his executive staff.
The Port is composed of three operating divisions, namely, Aviation, Maritime, and Economic
Development. The Aviation Division manages the Airport. The Maritime Division manages
industrial property connected with maritime businesses, recreational marinas, Fisherman’s
Terminal, cruise, grain, and maritime operations. The Economic Development Division focuses
on managing the Port’s industrial and commercial properties including conference and event
centers, encouraging tourism, developing minority and/or women-owned business opportunities,
and providing for workforce development in the aviation, maritime, and construction industries.
For 2019, the Port had total operating revenues of $764.2 million, which represents a 10.8 percent
increase from 2018. Total operating expenses increased from $397.6 million in 2018 to $443.1
million in 2019. The Port’s net operating income before depreciation increased $29.3 million from
2018 to 2019.
Contact information related to this report
Address:         Port of Seattle
Attn: Don Kelley
P.O. Box 1209
Seattle, WA 98111
Contact:          Don Kelley, AFR Senior Manager, General Accounting
Telephone:       (206) 787-7042
Website:         www.portseattle.org
Information current as of report publish date.

Audit history
You  can  find  current  and  past  audit  reports  for  the  Port  of  Seattle   at 
http://portal.sao.wa.gov/ReportSearch. 

Office of the Washington State Auditor                                                                                Page 6

                 ABOUT THE STATE AUDITOR’S OFFICE
The State Auditor’s Office is established in the state’s Constitution and is part of the executive
branch of state government. The State Auditor is elected by the citizens of Washington and serves
four-year terms.
We work with our audit clients and citizens to achieve our vision of government that works for
citizens, by helping governments work better, cost less, deliver higher value, and earn greater
public trust.
In fulfilling our mission to hold state and local governments accountable for the use of public
resources, we also hold ourselves accountable by continually improving our audit quality and
operational efficiency and developing highly engaged and committed employees.
As an elected agency, the State Auditor’s Office has the independence necessary to objectively
perform audits and investigations. Our audits are designed to comply with professional standards
as well as to satisfy the requirements of federal, state, and local laws.
Our audits look at financial information and compliance with state, federal and local laws on the
part of all local governments, including schools, and all state agencies, including institutions of
higher education. In addition, we conduct performance audits of state agencies and local
governments as well as fraud, state whistleblower and citizen hotline investigations.
The results of our work are widely distributed through a variety of reports, which are available on
our website and through our free, electronic subscription service.
We take our role as partners in accountability seriously, and provide training and technical
assistance to governments, and have an extensive quality assurance program.
Contact information for the State Auditor’s Office 
Public Records requests  PublicRecords@sao.wa.gov 
Main telephone  (564) 999-0950
Toll-free Citizen Hotline   (866) 902-3900
Website  www.sao.wa.gov 



Office of the Washington State Auditor                                                                                Page 7

          LETTER OF REPRESENTATION TO BE TYPED ON CLIENT LETTERHEAD
(USE THIS TEMPLATE FOR GAAP AUDITS)

[Date ① ]

Office of the Washington State Auditor
700 Fifth Avenue, Suite 4144
Seattle, WA 98104
To the Office of the Washington State Auditor:
We are providing this letter in connection with your audit of the Port of Seattle for the period from
January 1, 2019 through December 31, 2019. Representations are in relation to matters existing
during or subsequent to the audit period up to the date of this letter.
Certain representations in this letter are described as being limited to matters that are significant
or material. Information is considered significant or material if it is probable that it would change
or influence the judgment of a reasonable person.
We confirm, to the best of our knowledge and belief, having made appropriate inquires to be able
to provide our representations, the following representations made to you during your audit. If we
subsequently discover information that would change our representations related to this period, we
will notify you in a timely manner.

General Representations:
1.       We have provided you with unrestricted access to people you wished to speak with and
made available requested and relevant information of which we are aware, including:
a.  Financial records and related data.
b.  Minutes of the meetings of the governing body or summaries of actions of recent
meetings for which minutes have not yet been prepared.
c.  Other internal or external audits, examinations, investigations or studies that might
concern the objectives of the audit and the corrective action taken to address significant
findings and recommendations.
d.  Communications from regulatory agencies, government representatives or others
concerning possible material noncompliance, deficiencies in internal control or other
matters that might concern the objectives of the audit.
e.  Related party relationships and transactions.
f.   Results of our internal assessment of business risks and risks related to financial
reporting, compliance and fraud.
2.       We acknowledge our responsibility for compliance with requirements related to
confidentiality of certain information, and have notified you whenever records or data
containing information subject to any confidentiality requirements were made available.

                  3.       We acknowledge our responsibility for compliance with applicable laws, regulations,
contracts and grant agreements.
4.       We have identified and disclosed all laws, regulations, contracts and grant agreements that
could have a direct and material effect on the determination of financial statement amounts,
including legal and contractual provisions for reporting specific activities in separate funds.
5.       We have complied with all material aspects of laws, regulations, contracts and grant
agreements.
6.       We acknowledge our responsibility for establishing and maintaining effective internal
controls over compliance with applicable laws and regulations and safeguarding of public
resources, including controls to prevent and detect fraud.
7.       We have established adequate procedures and controls to provide reasonable assurance of
safeguarding public resources and compliance with applicable laws and regulations.
8.       Except as reported to you in accordance with RCW 43.09.185, we have no knowledge of
any loss of public funds or assets or other illegal activity, or any allegations of fraud or
suspected fraud involving management or employees.
9.       In accordance with RCW 43.09.200, all transactions have been properly recorded in the
financial records.


X             X
Stephen P. Metruck                                   Dan Thomas
Executive Director                                     Chief Financial Officer

X
Rudy Caluza
Director, Accounting and Finance Reporting

                                     Exit Recommendations
Port of Seattle
Audit Period Ending: 12/31/2019 

We are providing the following exit recommendations for management’s consideration. They are
not referenced in the audit report. We may review the status of the following exit items in our next
audit.

Payroll - Timesheet approvals
During a controls meeting with central human resources, we were informed of a concern
regarding the lack of oversight of timesheet approvals in the Aviation Division. Central human
resources self-identified several instances of incorrect earn codes being approved on timesheets,
which resulted to overpayments in paychecks:
    The Security department had two employees with a total overpayment of $3,831
    The Maintenance department had two employees with a total overpayment of $1,937
    The Operations department had one employee with a total overpayment of $341

While the Port self-identified the incorrect earn codes, we recommend the Port establish a
sufficient review process to ensure timesheets are accurate and complete when submitted to
central payroll for processing.

Port Response
Aviation Security:
Several of the specific instances detailed above apply to other operations in the Aviation
Division and are responded to accordingly following Aviation Security’s response.
Please find a response to the specific instances applicable to Aviation Security as follows.
Fungchenpen – case facts:
    Employee submitted timecard for 80 hours straight time pay after only working 8
hours and calling in sick for 72 hours
    Aviation Security’s normal payroll audit noted the discrepancy and the employee
was advised via email for immediate correction.
    Fungchenpen requested to cover the time with sick leave one day after payroll
had closed.
    A payroll correction was immediately submitted (approximately 24 hours later)
Aviation Security Actions:
1. Aviation Security will continue 100% auditing of timecards and all noted
discrepancies will be sent to employee for immediate correction (current process)

Page 1 of 3

                                     Exit Recommendations
Port of Seattle
Audit Period Ending: 12/31/2019 
2. If we do not receive a response prior to payroll closeout, Aviation Security will now
change straight time not worked to an LWOP status. (new process)
Agyeman – case facts:
    After receiving HR approval for PHEL the employee was advised to track the
usage of approved hours. Note: All employees approved for PHEL are expected
to track their available hours per HR policy
    Employee submitted timecard requesting pay for a combination of PHEL and
EFMLA pay.
    Hours were not available, and overpayment occurred. 
Aviation Security Actions:
    Aviation Security will continue 100% auditing of timecards and all noted
discrepancies will be sent to employee for immediate correction (current process)
    Aviation Security will be granted access to the Labor Distribution Report. (new
process)
    Aviation Security will randomly spot check employees with zero balance against
their timecards (new process)
    If any employee has requested pay for hours not available Aviation Security will
change the pay code to indicate LWOP (new process)
Aviation Operations
Jewell – case facts:
    Employee was overpaid FMLA hours on 1 shift
    Manager received conflicting reports on employees end date of FMLA
o Response from Sedgewick with approved dates was received by Manager on
11/5, which was after the dates employee submitted eFMLA time
o HR response denoted total hours available, but did not outline end date
Aviation Operations Actions:
    Aviation Operations will continue 100% auditing of timecards and all noted
discrepancies will be sent to employee for immediate correction (current process)
    Aviation Operations will be granted access to the Labor Distribution Report. (new
process)
    Proposed Future Action – Av/Operation payroll personnel would receive notification
from HR when an employee has exceeded approved hours so corrective action can be
taken immediately. In this case, there was no clear indication that hours had been
exceeded

Page 2 of 3

                                     Exit Recommendations
Port of Seattle
Audit Period Ending: 12/31/2019 

Aviation Maintenance
In looking into the below cases regarding incorrect earn codes, the following actions will
be taken by Aviation Maintenance to reconcile payroll processing moving forward:
Esguerra - Miscoded Expanded FMLA hours.
    After receiving approval for EFMLA from HR, the employee will be advised to
track the usage of hours as expected upon approval. 
    AVM will address unapproved dates or hour overages by utilizing both internal
reports from Maximo time reporting data and the Labor Distribution Report
accessible in HCM.
    We anticipate no further discrepancies after 12/31/20 as the use of Extended
FMLA has expired. Time code 217 will be removed from Maximo to avoid use in
error. After communication with the employee, any misuse of time coding will be
changed to LWOP or another Leave Type per direction from the employee or
their Manager.
Lett - Shift differential report with Pd Parental Leave in error.
    AVM was just recently been notified that no shift differential is to be utilized in
conjunction with Paid Parental Leave. AVM will take corrective action
immediately to address this in our department payroll process.
    The AVM Payroll Administrator will audit PPL time report codes prior to
approval each pay period via internal payroll reports.
    The Payroll Administrator will continue to contact the employee regarding any
discrepancies for immediate correction.







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