The Audit meeting scheduled for 2020-05-07 at Remote

Transcript

The Audit meeting scheduled for 2020-05-07 at Remote

SO I JUST WANT TO SAY THANK YOU JOE
AND NOW IT'S MY UNDERSTANDING THAT THE COMMISSIONERS HAVE BEEN PROVIDED WITH COPIES OF OUR PRESENTATION MATERIALS WHICH INCLUDE THE EXIT CONFERENCE HANDOUT
THIS IS TYPICALLY OUR MEETING AGENDA, WHICH WE'LL BE PRESENTING VIA THE POWERPOINT TODAY
YOU ALSO HAVE A COPY OF THE PORT OF SEATTLE'S 2018 ACCOUNTABILITY AUDIT REPORT AS WELL AS A COPY OF THE PORT SEATTLE INDUSTRIAL DEVELOPMENT CORPORATION'S 2015 TO 2018 ASSESSMENT AUDIT REPORT
ALSO, INCLUDED WITH YOUR PRESENTATION MATERIALS IS AN EXIT ITEM HANDOUT
IF YOU'RE NOT FAMILIAR WITH EXIT ITEMS, EXIT ITEMS ARE RECOMMENDATIONS TO ADDRESS CONTROL DEFICIENCIES OR NON COMPLIANCE WITH LAWS OR REGULATION THAT HAVE AN INSIGNIFICANT OR A IMMATERIAL EFFECT ON THE ENTITY
COMMONLY REFERRED TO AS HOUSEKEEPING ITEMS, EXIT ITEMS ARE PROVIDED FOR MANAGEMENT'S CONSIDERATION, BUT NOT REFERENCED IN OUR AUDIT REPORTS
WE'VE ALSO INCLUDED THE PORT'S RESPONSE TO OUR EXIT RECOMMENDATION
OF COURSE MANAGEMENT IS NOT REQUIRED TO RESPOND TO EXIT ITEMS HOWEVER, THE PORT IS VERY PROACTIVE IN ADDRESSING ANY AUDIT RECOMMENDATIONS FROM SAO WHICH WE DEFINITELY APPRECIATE
IF AT ANYTIME DURING THE PRESENTATION PORT MANAGEMENT WOULD LIKE TO STEP IN AND DISCUSS THEIR RESPONSE TO ANY NOTED EXIT RECOMMENDATIONS, PLEASE FEEL FREE TO DO SO
OTHERWISE, WE CAN PROVIDE AN OPPORTUNITY AT THE END OF THE PRESENTATION TO DISCUSS THE PORT'S RESPONSE TO ANY RECOMMENDATION
SO CONTINUING ON THIS SLIDE
THE FIRST AREA THAT WE REVIEWED WAS THE PORT'S INDUSTRIAL DEVELOPMENT CORPORATION
WE PERFORMED AN ASSESSMENT AUDIT OF THE PORT'S IDC FOR FISCAL YEAR 2015 TO 2018
PER STATE LAW, AN ASSESSMENT AUDIT OF THE IDC IS REQUIRED TO BE PERFORMED AT LEAST ONCE EVERY THREE YEARS
OUR AUDIT FOCUSED ON REVIEWING THE IDC'S INTERNAL CONTROLS OVER OPERATIONS AND TO DETERMINE WHETHER CONTROLS COMPLY WITH STATE LAW
OUR REVIEW OF THE IDC NOTED NO ISSUES AND AGAIN WE'LL ISSUE A SEPARATE ASSESSMENT AUDIT REPORT FOR THE IDC, WHICH IS INCLUDED WITH YOUR PRESENTATION MATERIALS
THE NEXT AREA WE REVIEWED WAS THE PORT'S SELF INSURANCE PROGRAMS ONCE AGAIN, THIS AREA IS SELECTED BASED ON STATUTE WHERE WE ARE REQUIRED BY STATE LAW TO CONDUCT AN EXAMINATION OF LOCAL GOVERNMENT SELF INSURANCE PROGRAMS AT LEAST ONCE EVERY TWO YEARS
FOR THIS AREA
WE MET WITH PORT STAFF TO GAIN AN UNDERSTANDING OF THE INTERNAL CONTROLS OVER THE ADMINISTRATION OF EACH SELF-INSURANCE PROGRAM
WE ALSO PERFORMED TESTS TO DETERMINE COMPLIANCE WITH THE REQUIREMENTS OF EACH PROGRAM
OUR REVIEW OF THE PORT SELF INSURANCE PROGRAMS NOTED NO ISSUES
IF THERE AREN'T ANY QUESTIONS, NEXT, THANK YOU
THE NEXT AREA WHERE WE'VE REVIEWED WAS PETTY CASH AND CHANGE FUNDS AT THE BELLE HARBOR MARINA
DURING AUDIT PLANNING, WE NOTED THAT IN OCTOBER 2019 THE PORT REPORTED MISSING CASH FROM THE SAFE AT BELLE HARBOR MARINA
OUR REVIEW OF THIS AREA FOCUSED ON MANAGEMENT'S FOLLOW-UP TO ADDRESS THE ISSUES OF CONTROLS OVER PETTY CASH AND CHANGE FUND AT THE MARINA
BASED ON A REVIEW, WE DETERMINE PORT MANAGEMENT TOOK APPROPRIATE STEPS TO ADDRESS THE ISSUES NOTED
THE NEXT AREA WE REVIEWED WAS OVERTIME PAY AT THE PORT'S FIRE DEPARTMENT
DURING AUDIT PLANNING WE NOTED A SIGNIFICANT INCREASE IN OVERTIME AT THE FIRE DEPARTMENT WHEN COMPARED TO PRIOR YEARS
OUR REVIEW FOCUSED ON DETERMINING WHETHER ADEQUATE CONTROLS WERE IN PLACE TO ENSURE PAYMENTS FOR OVERTIME ARE SUPPORTED WITH ADEQUATE DOCUMENTATION AND ARE ALLOWABLE PER PORT POLICY AND UNION REQUIREMENTS
WE ALSO TESTED SELECTED OVERTIME PAYMENTS FOR ADEQUATE SUPPORT AND COMPLIANCE WITH PORT POLICY AND UNION REQUIREMENTS
BASED ON OUR REVIEW, WE NOTED NO ISSUES
NEXT SLIDE, PLEASE
THANK YOU
NEXT WE REVIEWED AND EXAMINED THE PORT'S PROCUREMENT OF PROFESSIONAL SERVICE CONTRACTS
OUR REVIEW FOCUSED ON THE PORT'S CONTROLS TO ENSURE PROCUREMENT METHODS AND PROCEDURES COMPLY WITH STATE LAW
WE ALSO TESTED 17 PROFESSIONAL SERVICE CONTRACTS PROCURED BY THE PORT IN 2018
BASED ON OUR REVIEW, WE RECOMMENDED THE PORT MODIFY ITS POLICY REGARDING PUBLICATION AND SOLICITATION FOR PROFESSIONAL SERVICES SO ADVANCED PUBLICATION REQUIREMENTS ARE INCLUDED FOR CONTRACTS LESS THAN $200,000
WE ALSO REVIEWED THE PORT'S CONTROLS OVER ELECTRONIC FUNDS TRANSFERS
WE REVIEWED THE PORT'S INTERNAL CONTROLS OVER THE CREATION OF NEW VENDORS, MODIFICATIONS OF VENDOR BANK ACCOUNTS
AND PAYMENT DISBURSEMENTS
WE ALSO TESTED 33 SELECTED EDITIONS MODIFICATIONS OF VENDOR INFORMATION IN THE PORT'S DATABASE
BASED ON OUR REVIEW WE RECOMMENDED THE PORT STRENGTHEN ITS INTERNAL CONTROLS OVER EFT DISBURSEMENTS BY ENSURING POLICIES OVER EFT VENDOR SET UP AND CHANGES ARE CLEARLY DOCUMENTED AND ACCURATELY REFLECTS STAFF RESPONSIBILITIES
WE ALSO RECOMMENDED THE PORT CONSISTENTLY DOCUMENT TO EVIDENCE THE PORT'S FOLLOW UP ON REQUESTS TO CHANGE VENDOR BANK ACCOUNT INFORMATION
LASTLY WE REVIEWED THE PORT'S USE OF EMPLOYEES FOR PUBLIC WORKS PROJECTS SPECIFICALLY AT THE MARINE MAINTENANCE DEPARTMENT
IT SHOULD BE NOTED THAT THIS AREA WAS SELECTED BASED ON A CITIZEN HOTLINE REFERRAL RECEIVED BY OUR OFFICE
OUR REVIEW FOCUSED ON THE PORT'S CONTROLS FOR DETERMINING THE USE OF EMPLOYEES FOR PUBLIC WORKS PROJECTS
WE ALSO SELECTED TO TEST PUBLIC WORKS PROJECTS PERFORMED BY PORT EMPLOYEES FOR COMPLIANCE WITH STATE LAW
BASED ON A REVIEW WE RECOMMENDED THE PORT CONSISTENTLY COMPLETE A FORMAL EVALUATION OF SELF PERFORMED WORK EXCEEDING $40,000 TO DEMONSTRATE COMPLIANCE WITH STATE LAW
I CAN STOP HERE FOR QUESTIONS
THAT SUMMARIZES AREAS WE REVIEWED
I CAN STOP HERE FOR QUESTIONS BEFORE I MOVE INTO CONCLUDING REMARKS ABOUT ANY OF THE AREAS REVIEWED OR THE PROCEDURES PERFORMED
COMMISSIONER CALKINS, WOULD WE LIKE TO RUN THROUGH EACH COMMITTEE MEMBER FOR QUESTIONS AND COMMENTS AT THIS TIME OR WAIT UNTIL THE END OF THE PRESENTATION? LET'S DO THAT AND I HAVE NO QUESTIONS AT THIS TIME
COMMISSIONER BOWMAN? NO QUESTIONS AT THIS TIME, THANK YOU
AND CHRIS BURKEY? I DON'T HAVE ANY QUESTIONS AT THIS TIME
GREAT
MOVING INTO CONCLUDING REMARKS
TOTAL ESTIMATED AUDIT COSTS WILL APPROXIMATE ABOUT A HUNDRED AND SEVEN THOUSAND DOLLARS
THE PORT'S NEXT SCHEDULED AUDIT IS SCHEDULED TO BE CONDUCTED IN SEPTEMBER OF 2020 AND WILL COVER THE ACCOUNTABILITY FOR PUBLIC RESOURCES AS WELL A REVIEW OF THE CPAS WORK PAPERS FOR THE PORT'S FINANCIAL STATEMENT AUDIT, THE PORT'S AUDIT REPORTS WILL BE PUBLISHED ON SAO'S WEBSITES WITHIN THE NEXT WEEK OR SO
SO YOU CAN KEEP A LOOKOUT FOR THOSE
WE ALSO WANTED TO MENTION THAT WE'VE OBTAINED A MANAGEMENT REPRESENTATION LETTER WHICH INCLUDES WRITTEN REPRESENTATIONS NEEDED FROM MANAGEMENT FOR ALL PERIODS COVERED BY OUR AUDIT
AND I WANTED TO SHARE ONE MORE AUDIT HIGHLIGHT AND THAT WAS THE APPRECIATION AND THE COLLABORATION AND ASSISTANCE FROM OUR AUDIT LIAISON DEBBIE BROWNING
DEBBIE HELPED ENSURE A SMOOTH AUDIT PROCESS FROM START TO FINISH AND WE WANT TO SHOW OUR THANKS AND APPRECIATION AND WE LOOK FORWARD TO WORKING WITH DEBBIE YOU AGAIN IN THE FUTURE
THAT CONCLUDES OUR EXIT CONFERENCE AT THIS TIME
WE'D BE HAPPY TO ANSWER ANY QUESTIONS
COMMISSIONER CALKINS, ARE YOU UNMUTED? THERE I AM
YEAH, I JUST ONE QUICK QUESTION FOR YOU
AS YOU EXAMINE THE OVERTIME QUESTION AT THE FIRE DEPARTMENT, WHAT WAS THE EXPLANATION FOR THE SIGNIFICANT INCREASE YEAR TO YEAR? WAS IT SIMPLY HIGHER DEMANDS ASSOCIATED WITH INCREASING PASSENGER FLOWS THE AIRPORT? YEAH, THAT'S CURRENTLY OUR UNDERSTANDING
YOU KNOW
JUST THE NATURE OF OPERATIONS DURING THE YEAR I WOULD SUPPOSE AND STAFFING, BUT I'D HAVE TO GET BACK TO YOU ON THE MORE SPECIFICS ON THAT
JUST THE NATURE OF OPERATIONS FROM YEAR TO YEAR, YOU KNOW, AND STAFFING LEVELS AT THE FIRE DEPARTMENT
I'D HAVE TO GET BACK TO YOU ON THE SPECIFICS, EXACTLY
RANDY KRAUSS FROM OUR FIRE DEPARTMENT IS ON THE CALL AS WELL
SHALL I UNMUTE HIM AND PERHAPS HEAR FROM HIM ON THAT? AWESOME
RANDY SHOULD BE UNMUTED
THANK YOU, LAUREN
CAN YOU HEAR ME? YES, WE CAN
HI EVERYBODY
YEAH, COMMISSIONER CAULKINS WE WERE STAFFING A COUPLE POSITIONS
WE ADDED A CARE CAR SO WE WERE STAFFING IT WITH TWO FIREFIGHTERS PER SHIFT ON OVERTIME
THAT WAS THE SPIKE
LANCE APPROVED SOME ADDITIONAL FUNDS TO COVER THAT COST AND THEN WE WERE APPROVED TO HIRE SUBSEQUENTLY AFTER THAT
SO THE OVERTIME WILL BE DROPPING OFF, BUT THAT WAS THE INCREASE
OKAY, AND LET'S GO AROUND TO THE OTHER COMMITTEE MEMBERS TO SEE IF THEY HAVE ANY ADDITIONAL QUESTIONS
THANK YOU
RANDY
COMMISSIONER BOWMAN? I'VE NO FURTHER QUESTIONS
I WAS GOING TO ASK A SIMILAR QUESTION ABOUT THE FIRE DEPARTMENT SO THANK YOU
OKAY, AND I BELIEVE AT THIS POINT GLENN IS GOING TO TAKE OVER THE PRESENTATION
IS THAT CORRECT? THAT IS CORRECT
WONDERFUL
GO AHEAD GLENN
LAUREN, CAN YOU PULL UP THE-- GIVE ME ONE MOMENT IT'S A LITTLE SLOW TODAY
ALL RIGHT
YOU SHOULD BE GOOD
OKAY NEXT SLIDE
COMMISSIONERS, THE FIRST THING THAT CHRISTINA GERKE AND I WANT TO TALK TO YOU ABOUT TODAY IS A REQUIRED COMMUNICATION BYSTANDARDS
WE'RE REQUIRED TO TALK TO YOU ABOUT OUR INDEPENDENCE, OUR CHARTER ON A PERIODIC BASIS, OUR QUALITY ASSURANCE PROGRAM AND OUR ISSUE, FOLLOW-UP, MONITORING, PROCESS
SO NEXT SLIDE, PLEASE
SO ON INDEPENDENCE I'M HAPPY TO REPORT THAT WE CONTINUE TO BE INDEPENDENT
WE FUNCTIONALLY REPORT TO THE AUDIT COMMITTEE, WHICH IS YOU, AND ADMINISTRATIVELY TO EXECUTIVE DIRECTOR METRUCK
WE ALSO DISPLAY THIS THROUGH OUR WORK THROUGH ASSURING THAT EVERYTHING WE DO IS OBJECTIVE AND AND YOU KNOW, AND WE MEET THE REQUIREMENTS OF THIS STANDARD
NEXT SLIDE, PLEASE
ALSO ON A PERIODIC BASIS WE'RE REQUIRED TO REVIEW THE CHARTER TO MAKE SURE THAT THE INTERNAL AUDIT CHARTER, NOT THE AUDIT COMMITTEE CHARTER, THE INTERNAL AUDIT CHARTER IS STILL RELEVANT
THE LAST TIME THE CHARTER WAS UPDATED WITH 2012
SO IT HAS BEEN A WHILE
IN REVIEWING IT
YOU KNOW, WE HAVE SOME MINOR EDITS, WHICH I'M GOING TO CIRCULATE TO ALL COMMITTEE MEMBERS AND TO EXECUTIVE DIRECTOR METRUCK BECAUSE APPROPRIATE SIGNATURES ARE REQUIRED
I THINK IT'S DUE FOR A MINOR REFRESH
SO IN THE NEXT AUDIT COMMITTEE MEETING I INTEND TO SHARE IT WITH EVERYONE AND GET AT LEAST AN UPDATED VERSION DOCUMENTED FOR THE RECORD
NEXT SLIDE, PLEASE
ALSO, WE'RE REQUIRED TO DO A QUALITY REVIEW
IT IS ALSO CALLED THE PEER REVIEW ON A PERIODIC BASIS
MOST RECENTLY IN 2018 WE HAD AN EXTERNAL PEER REVIEW CONDUCTED
THEY WRAPPED UP AND AT THE END OF JAN OF 2019
SO ON A PERIODIC BASIS, WE ARE CONDUCTING SELF-ASSESSMENT OF OURSELVES AND WE'LL DO ONE THIS YEAR
LAST YEAR'S REPORT BY ALGA OR THE ASSOCIATION OF LOCAL GOVERNMENT AUDITORS GAVE US THE HIGHEST RATING POSSIBLE SO WE CONTINUE TO MEET THE HIGH STANDARDS THAT ARE REQUIRED IN THE INDUSTRY
NEXT SLIDE
AND THEN THE FINAL ITEM THAT I'D LIKE TO TALK ABOUT IS OUR FOLLOW-UP PROCESS
ON ALL OUR AUDIT ISSUES IT'S REALLY IMPORTANT TO MAKE SURE THAT WE DO FOLLOW UP ON THEM AND WE MAKE SURE THAT THEY'RE ADDRESSED BECAUSE IF WE WRITE ISSUES AND NOBODY ADDRESSES THEM AND THEY'RE JUST PUT IN A SHELF THEN YOU'RE NOT REALLY ADDING ANY VALUE TO THE ORGANIZATION
IT'S WHEN THEY ARE CLOSED OUT AND ADDRESSED THAT THEY BECOME IMPORTANT AND THEY TRULY ADD VALUE
SINCE 2017 WE'VE BEEN FOLLOWING UP ON ALL OUR AUDIT ISSUES AND ON A PERIODIC BASIS
WE HAVE BEEN PRESENTING THEM TO THE AUDIT COMMITTEE
NOW, THE COMMITTEE'S ROLE IS IF SOMETHING WOULD LAG BEHIND AND CREATE RISK, I WOULD ADVISE YOU ACCORDINGLY AND IT WOULD BE UP TO YOU AND DIRECTOR METRUCK TO TAKE ACTION OF THAT
NEXT SLIDE
PLEASE AS OF RIGHT NOW, WE HAD 38 OPENED ISSUES AT THE BEGINNING OF THIS YEAR
THROUGH THE AUDITS THAT WE'VE ISSUED SINCE JAN 1ST, WE HAD ANOTHER 13 ISSUES AND WE'VE CLOSED OUT ABOUT 7
SO 44 ARE STILL OPENED
NOW ALL OF THOSE THAT ARE OPENED HAVE YOU KNOW, I'M HAPPY TO SAY THERE THEY HAVE VALID-- THEY'RE NOT DUE AND THE FEWTHAT ARE COMING DUE VERY QUICKLY HAVE HAD SUBSTANTIAL WORK ON THEM AND THEY'RE VERY CLOSE TO BE CLOSED OUT
SO THERE'S NOTHING SIGNIFICANT THAT I NEED TO HIGHLIGHT TO YOU AT THIS POINT
THERE WAS ONLY ONE SMALLER ISSUE THAT WAS DELAYED SLIGHTLY BEYOND ITS REQUIRED DUE DATE AND IT WAS PRIMARILY BECAUSE OF THE COVID EMERGENCY
SO COVID'S MINIMALLY AFFECTED AUDIT ISSUES AND ONCE THEY'RE SITTING OUT THERE THEN RISKS TO THE ORGANIZATION HAVE BEEN ADDRESSED
APPENDIX A AND B OF THIS DECK WILL LIST OUT ALL OPENED, OUTSTANDING ISSUES AND WE'LL PROVIDE A LITTLE INDEX AS TO WHY THERE ARE ONES OPENED, ONES THAT HAVE CLOSED
YOU KNOW, THE ONE ISSUE THAT IS A LITTLE BEHIND BECAUSE OF THE COVID EMERGENCY
NEXT SLIDE PLEASE
AND I BELIEVE THAT'S IT ON FOLLOW-UP
SO BEFORE I GO INTO THE AUDIT PLAN, PERHAPS I WILL TAKE ANY QUESTIONS
COMMISSIONER CALKINS
IF YOU WANT TO DO THE-- IF YOU HAVE ANY QUESTIONS OR COMMISSIONER BOWMAN? I HAVE NO QUESTIONS AS THIS TIME SO LET'S GO TO BOWMAN
HI GLENN, JUST A QUICK QUESTION THIS COMMISSIONER BOWMAN
IN TERMS OF THE ISSUES THAT ARE STILL OPEN, IS THERE A WAY FOR THE PUBLIC TO ACCESS THAT INFORMATION? IS IT SOMEWHERE ON OUR WEBSITE SO THEY'RE JUST AWARE? YES THAT'S A VERY GOOD QUESTION COMMISSIONER BOWMAN
ONE OF THE THINGS WE'RE STARTING TO DO IS-- WELL ALL AUDIT COMMITTEE MATERIALS ARE POSTED WITH COMMISSIONER RECORDS WITH ALL COMMISSIONER MATERIALS
ADDITIONALLY
WE DO HAVE OUR INTERNAL AUDIT WEBSITE WHICH LISTS ALL AUDIT REPORTS
FOR OUTSTANDING ISSUES THAT ARE NOT CLOSED OR EVEN THE ONES THAT ARE CLOSED, THIS DECK IS PUBLICLY AVAILABLE
IT IS WITH ALL COMMISSIONER MATERIALS
SO ANY MEMBER OF THE PUBLIC AND PULL UP THIS DECK AND IN THE APPENDIX SECTION OF THE DECK IT WILL LIST OUT ALL OPEN ISSUES AT THIS POINT
THAT'S FINE
I MEAN, I'M NOT A COMMUNICATIONS EXPERT JUST I I KNOW THAT'S NOT AN ISSUE THAT THE PUBLIC WOULD NORMALLY BE CURIOUS ABOUT BUT JUST
IF THERE'S A WAY TO MAKE IT A LITTLE EASIER FOR THEM TO FIND, THAT ALWAYS SEEMS LIKE A GOOD IDEA
BUT THANK YOU VERY MUCH
COMMISSIONER BOWMAN, I WILL LOOK AT-- WE DO HAVE ON OUR PORT WEBSITE AN INTERNAL AUDIT PAGE WHERE ALL OF OUR MATERIAL IS POSTED AND I WILL CONSIDER-- I WILL ADD THIS DECK AND THIS INFORMATION TO THAT SO WE DO HAVE IT AVAILABLE IN A DIFFERENT LOCATION AS WELL THAT'S EASIER TO FIND
COMMISSIONER CALKINS? CHRIS, ANY QUESTIONS? A COMMENT IS I'D LIKE TO SEE IN THE FUTURE MORE OF A-- NOT JUST STATUS BUT KIND OF AN AGING REPORT JUST SO THAT WE CAN REALLY HAVE VISIBILITY INTO HOW LONG SOME OF THESE ITEMS HAVE BEEN HANGING OUT THERE
SURE
ABSOLUTELY
I THINK THE ONE ITEM THAT IS OVERDUE, IN THE APPENDIX, WE DO LIST THE DATES THAT THEY WERE DUE AND AT THIS POINT THE ONE ITEM THAT IS OVERDUE WAS DUE ON DECEMBER 31ST 2019
IT'S JUST DELAYED BECAUSE OF THE COVID EMERGENCY
BUT I WILL TRY TO GET A REPORT DRAFTED
WELL, TWO THINGS
ONE IS IS IT OVERDUE AND ANOTHER ONE IS KIND OF HOW LONG HAS THIS BEEN HANGING OUT THERE AND TO ME IT SEEMS LIKE WE NEED SOME TRANSPARENCY TO BOTH THOSE DIMENSIONS
NOTED
AND I KNOW DAN AND MY TEAM IS TAKING COPIOUS NOTES AND SINCE HE LEADS THE FOLLOW UP PROCESS, WE'LL MAKE THAT ADJUSTMENT AND TWEAK
NEXT, IF THERE ARE NO FURTHER QUESTIONS, THE NEXT AGENDA ITEM IS THE 2020 AUDIT PLAN
I JUST WANT TO BRIEFLY PROVIDE YOU WITH THE STATUS OF THIS
THIS IS THE APPROVED PLAN ON THIS SCREEN
YOU KNOW WHAT WE'VE GOT LIMITED CONTRACT COMPLIANCE AUDITS AND THAT'S PRIMARILY WITH CONCESSIONAIRES AT THE AIRPORT AND THROUGHOUT OTHER LOCATIONS OF THE PORT FROM TIME TO TIME THAT PAY A PERCENTAGE OF REVENUES IN ADDITION TO RENT
NOW
MOST OF THESE CONCESSIONAIRES HAVE BEEN HIT PRETTY HEAVILY WITH THE COVID EMERGENCY OR PANDEMIC
LUCKILY
MANY OF THEM GOT US THEIR DATA BEFORE THE EMERGENCY SET IN SO SINCE WE LOOK AT PRIOR YEARS, SEVERAL OF THESE WE WILL BE ABLE TO COMPLETE
THERE'S ABOUT A COUPLE ON HERE THAT, ABOUT THREE, THAT WE HAVEN'T GOTTEN DATA YET FROM AND WE'RE NOT PRESSURING THAT GIVEN THE HARDSHIP THAT THEY'RE GOING THROUGH
WE WILL AFTER THE EMERGENCY SETTLES DOWN OR THEY GET BACK WE WILL OPEN UP DIALOGUE AGAIN, OR WE MIGHT EVEN JUST DEFER THE AUDITS UNTIL NEXT YEAR DEPENDING ON WHERE THEY STAND
ON THE OPERATIONAL SIDE, YOU KNOW, AND WE'VE GOT SOME AUDITS IN PROCESS AND SOME DEPENDING WHERE THE BUSINESS GOES AND WHAT WE DIFFER
WE MIGHT HAVE TO POSTPONE SOME OF THESE AND PULL SOMETHING ELSE IN ON THE INFORMATION TECHNOLOGY SIDE, YOU KNOW, THE T2 AIRPORT PARKING GARAGE SYSTEM REPLACEMENT APPARENTLY ISN'T GOING TO HAPPEN TILL LATE THIS YEAR OR EARLY NEXT YEAR
SO THAT ONE WILL BE DEFERRED UNTIL NEXT YEAR
NEXT SLIDE, PLEASE
WE'VE GOT A SERIES OF CONTINGENCY AUDITS THE COMMISSION APPROVED, THE AUDIT COMMITTEE APPROVED IN THE EVENT THAT WE CAN'T COMPLETE, OR IF WE HAVE EXTRA RESOURCES THESE WERE ABLE TO BE MOVED UP
NOW AGAIN, THESE WILL UNDERGO THE SAME CONSTRAINTS AS THE PREVIOUS SLIDE
NEXT SLIDE, PLEASE
SO IF YOU LOOK AT OUR ENTIRE PLAN, YOU KNOW, AT THIS POINT IN THE YEAR I'D LIKE TO SEE, I WOULD NORMALLY LIKE TO SEE A LOT OF YELLOW AND GREEN AREA
SO, YOU KNOW, I'D LIKE TO SEE US A LITTLE FURTHER ALONG BUT BECAUSE OF A VARIETY OF REASONS WITHIN THE BUSINESS PRIMARILY ALL DEALING WITH COVID-19, SOME OF THESE HAVE SLOWED DOWN A LITTLE BIT PRIMARILY BECAUSE PEOPLE CAN'T GET THE INFORMATION
A LOT OF VENDORS ARE NOT AVAILABLE
SO YOU KNOW I THINK MY RECOMMENDATION IS THAT IN THE JUNE AUDIT COMMITTEE MEETING THAT WE DO HAVE SCHEDULED, WE MAINTAIN THAT AND I COME BACK TO YOU WITH A PROPOSAL ON AN AMENDED AUDIT PLAN BECAUSE I'LL HAVE A BETTER IDEA AT THAT POINT
I ALSO SEE US MAYBE PICKING UP A LITTLE BIT MORE THAT'S MORE RELEVANT TO THE IMPACT, COMMISSIONERS, FROM THE COVID EMERGENCY
SO FOR INSTANCE, WE HAVE A LOT OF LEASES THAT WE'VE DEFERRED RANKED ON AND A LOT OF MANUAL PROCESSES THAT HAVE BEEN SET IN PLACE BECAUSE OF THAT AND I THINK AUDIT POTENTIALLY HAS AN OPPORTUNITY TO ASSIST THE BUSINESS IN THAT
YOU KNOW, THERE ARE OTHER THINGS ON GRANTS AND FUNDING THAT WE'RE GETTING AS IN FEMA, THEY ALL TALK ABOUT THAT POTENTIALLY WE CAN ASSIST THE BUSINESS WITH
SO HOW CAN WE HELP THE BUSINESS NOW BECAUSE WE HAVE THE SKILL SET, WE HAVE THE RESOURCES
WE STILL HAVE THE ABILITY TO DO SOME AUDITS BUT A LOT OF THIS PLAN WILL HAVE TO BE TWEAKED A LITTLE BIT
SO MY RECOMMENDATION IS IN JUNE TO HAVE THAT AUDIT COMMITTEE MEETING AND HAVE THE DISCUSSION ON THIS
ANOTHER IMPORTANT THING WITH THE JUNE AUDIT COMMITTEE MEETING IS MOSS ADAMS NEEDS TO BE THERE TO PRESENT THEIR CLOSEOUTS AND FINANCIAL STATEMENT AUDIT
SO THAT'S MY GUIDANCE AND MY RECOMMENDATION
AND THAT'S ALL I HAD ON OUR AUDIT PLAN OR AUDIT STATUS
QUESTIONS COMMENTS? COMMISSIONER CALKINS?
GLENN I APPRECIATE THE CONCERN AMOUNT OF REFORMATTING ARE AUDIT TO ACCOMMODATE ALL THESE NEW PROCESSES WE'RE GOING TO BE WORKING ON RELATED TO THE DEFERRALS, JUST REALLY COVERING EVERYTHING
I THINK THAT'S A GREAT IDEA
COMMISSIONER BOWMAN
HI, THANK YOU GLENN
ARE YOU GETTING YOUR FEEDBACK? NO, I'M NOT
WELL [INAUDIBLE] AND SO IT'S GOING TO BE VERY HARD FOR THEM TO FIND DATA
WE'VE STOPPED ASKING THEM FOR DATA
ESPECIALLY
A LOT OF THEIR OFFICES ARE CLOSED AND THERE'S NOBODY TO GIVE US THE DATA ANYWAYS
BUT THANK YOU COMMISSIONER
WE WILL
ANYTHING ELSE? ACTUALLY I THINK THAT ECHO MAY HAVE BEEN COMING FROM GLEN SO I MUTED HIM JUST BRIEFLY TO GO THROUGH IT
OKAY [LAUGHTER]
NO, I'M LOOKING FORWARD TO SEEING THE REVISED AUDIT PLAN AND WHERE WE'RE GOING TO END UP FOR THE YEAR
AND GLENN IF IT WOULD ASSIST IN MAKING SOME OF THOSE DETERMINATIONS BY HAVING MEETINGS WITH ME OR COMMISSIONER BOWMAN IN ADVANCE OF THE JUNE MEETING, WE'D BE HAPPY TO SCHEDULE TIME FOR THAT TOO
ALL RIGHT, YEAH
WILL DO COMMISSIONER
I WILL SET UP THOSE MEETINGS IN THE NEXT FEW WEEKS AND GET THOSE ROLLING SO WE CAN MOVE FORWARD
THANK YOU, LAUREN
STILL GETTING FEEDBACK FROM ME? NOT FROM YOU
SO IF YOU'RE UNMUTED ANYBODY ELSE WHO SPEAKS, WE'RE GETTING AN ECHO
SO WHILE YOU ARE NOT SPEAKING AND WE GO THROUGH COMMISSIONER QUESTIONS OR SOMEBODY ELSE, WE'LL JUST KEEP YOU MUTED AND THEN I WILL UNMUTE YOU AS SOON AS YOU NEED TO SPEAK AGAIN
WE CAN HEAR YOU
NEXT SLIDE
OKAY COMMISSIONERS THE NEXT ITEM THAT WE'RE GOING TO TALK ABOUT ARE OUR AUDITS AND OUR SPECIAL PROJECTS
WE'VE GOT 2 SPECIAL PROJECTS THAT WE'RE GOING TO HIGHLIGHT TODAY AND THEN FIVE AUDITS
FOUR OF WHICH ARE GOING TO BE DISCUSSED IN PUBLIC SESSION AND ONE THAT IS SECURITY SENSITIVE THAT WILL BE DISCUSSED IN A SECURITY SENSITIVE NON-PUBLIC SESSION AFTER THE AUDIT COMMITTEE MEETING IN A SEPARATE MEETING
NEXT SLIDE PLEASE
SO COMMISSIONERS, AS COMMISSIONER CALKINS MENTIONED EARLIER, ONE OF THE THINGS YOU KNOW, I AND THE TEAM TALKED ABOUT WAS HOW CAN WE HELP THE PORT RIGHT NOW? I KNOW THE PORT GOT A HUNDRED NINETY TWO MILLION DOLLARS IN FEDERAL MONEY FROM THE FAA FOR AIRPORT OPERATIONS, BUT THERE'S STILL A LOT OF MONEY WE SPEND ON SAFETY RELATED STUFF FOR CONSTRUCTION, FOR ALL THE CHANGES THERE, FOR THE SANITATION AND CLEANING
SO WHEN THE PRESIDENT DECLARED NATIONAL EMERGENCY, FEMA WAS ACTIVATED AND FEMA HAS GOT QUITE A SIGNIFICANT AMOUNT OF FUNDING FOR ALL THESE PROGRAMS SO WE ARE ELIGIBLE FOR FEMA PUBLIC ASSISTANCE AND CERTAIN EXPENSES DATING BACK ALL THE WAY TO JANUARY 20TH ARE CONSIDERED ELIGIBLE
FEMA WILL REIMBURSE US AT 75% AND THE STATE COORDINATING OFFICE WILL GO OUT THROUGH THE STATE AND FIND ADDITIONAL 25% TO MAKE US WHOLE ON THE FUNDS THAT WE'VE EXTENDED
NOW THESE HAVE TO MEET THE CRITERIA OF FEMA, BUT THE TEAM DID GO OUT AND RESEARCH LOTS OF THIS AND PROVIDED A REPORT BACK TO THE EXECUTIVE TEAM AT THE PORT
NEXT SLIDE, PLEASE
SO THIS SLIDE TALKS A LITTLE BIT ABOUT WHAT FEMA WILL REIMBURSE AT A VERY HIGH LEVEL
ONE OF THE THINGS WE DID IS WE WENT IN AND WE LOOKED AT ALL OF THE EXPENSES WITHIN THE PORT AND WORKED WITH THE COORDINATING OFFICE TO MAKE SURE THAT WE WERE SETTING THE TRACKS CORRECTLY FOR THE PORT SO WE COULD GATHER THIS INFORMATION AS IT CAME THROUGH IN THE SYSTEMS AND THE PORT COULD THEN SUBMIT FOR REIMBURSEMENT FROM FEMA FOR THIS
AGAIN, THE LARGEST ITEMS ARE GOING TO BE AT THE BOTTOM: THE CONSTRUCTION AND THE DISINFECTION OF PUBLIC FACILITIES
OKAY NEXT SLIDE, PLEASE
SO ON THE CONSTRUCTION RELATED SIDE WHAT FEMA TOLD US IS YOU KNOW ANY INCREMENTAL COSTS, THEY'LL REIMBURSE AND POTENTIALLY, YOU KNOW THE ADDITION OF A FULL-TIME SITE PROTECTION SUPERVISOR THAT WILL COME THROUGH A CHANGE ORDER, ALL OF OUR CONSTRUCTION CONTRACTS OVER A MILLION DOLLARS, HAND WASHING STATIONS, TOOL SANITATIONS
THOSE ITEMS ARE ELIGIBLE FOR SUBMISSION
NOW THEY DO HAVE TO GO TO SACRAMENTO AND THEN THEY COME BACK TO US AS APPROVED OR UNAPPROVED
BUT LOCALLY WE'VE GOTTEN THE GO-AHEAD TO SUBMIT CERTAIN THINGS AND THE APPROVAL
THE ENHANCED COVID SPECIFIC SAFETY COST, IT DEPENDS ON WHAT THE SAFETY COST IS, BUT MOST OF THE INCREMENTAL COSTS AND SANITIZATION COSTS WILL BE COVERED
WE SHOULD BE ABLE TO SUBMIT THOSE
SO NEXT SLIDE PLEASE
WE ALSO YOU KNOW IDENTIFIED THAT WE'VE SPENT ABOUT TWO OR THREE QUARTERS OF A MILLION DOLLARS IN SANITATION TO DATE AND WE'LL PROBABLY SPEND A LOT MORE A LITTLE BIT MORE
SO ALL OF THAT IS REIMBURSABLE
THEY DO HAVE A CUTOFF DATE AND THEN YOU KNOW, IT'S VERY LITTLE OVERTIME
ANY EMERGENCY PERSONNEL OVERTIME IS REIMBURSABLE AND FIRE DEPARTMENT HAD SOME NOT A LOT
BUT AS THOSE CONTINUE TO TRICKLE IN WE'LL SUBMIT THOSE
AND LIKE I SAID, THE TRACKS HAVE BEEN BUILT SO THAT BUSINESS CAN PICK THIS UP AND THE PORTAL HAS BEEN SET UP SO ALL WE HAVE TO DO FROM A BUSINESS PERSPECTIVE IS LOAD IT INTO THE PORTAL AND AND THE LOCAL FEMA OFFICE WILL SUBMIT IT TO THEIR SACRAMENTO OFFICE
NEXT SLIDE, PLEASE
I BELIEVE THATS IT ON FEMA
I'M GOING TO JUMP TO ONE MORE AND THEN I'LL TAKE QUESTIONS AND COMMENTS
INTERLOCAL AGREEMENTS
COMMISSIONER CALKINS YOU'D ASKED US TO DO A MAPPING OF INTERLOCAL AGREEMENTS
THERE'S A MEMO ATTACHED TO THE DECK THAT YOU SHOULD HAVE
WE LISTED OUT AND RISK RANKED ALL OF THE INTERLOCAL AGREEMENTS AS REQUESTED
NOW I WANT TO HIGHLIGHT THIS ISN'T AN AUDIT
IT'S JUST A DATA GATHERING AND RISK RANKING
SO WHEN WE GATHERED THE INTERLOCAL AGREEMENTS WE GATHERED THEM BY THE TYPE OF AGREEMENT AND RISK RANKED IT AND THEN WE LOOKED AT THE DOLLAR AMOUNT, WE RISK RANKED IT AND WE LOOKED AT THE LEGALITY OF THE AGREEMENT-- WHO'S THE AGREEMENT WITH AND WHO GOVERNS THAT
AND THAT'S HOW WE RISK RANK THEM AND IT JUST SETS THE FRAMEWORK NEXT YEAR WHEN WE ARE BUILDING OUR AUDIT PLAN FOR US TO LOOK THROUGH THAT AND POTENTIALLY ADD SOME ITEMS ADDED ONTO LOCAL AGREEMENTS
SO WITH THAT I'LL STOP AND TAKE QUESTIONS
GLENN I APPRECIATE BOTH EFFORTS AS I MENTIONED AT THE OUTSET OF THE MEETING
THE EFFORTS TO RECOUP WHATEVER WE CAN FROM FEMA FUNDS TO COVER THESE COVID RELATED EXTRAORDINARY EXPENSES
I THINK THAT'S AN EXCELLENT USE OF YOUR DEPARTMENT'S TIME
IN ADDITION THE ILA MAPPING AND RISK RANKING, I READ THROUGH THE ATTACHED DOCUMENT AND IT'S A GOOD EDUCATION FOR ANY SENIOR MANAGER, DEPARTMENT HEAD, COMMISSIONER, TO GET AN UNDERSTANDING OF THE BREADTH OF RELATIONSHIPS THE PORT HAS WITH OTHER PUBLIC AGENCIES IN THE AREA AND THE TYPE OF WORK THAT WE DO FROM AGREEMENTS BETWEEN OUR FIRE DEPARTMENT AND OTHER AGENCIES TO WHETHER IT'S MAINTENANCE OF VEHICLES OR EMERGENCY RESPONSE PLANS TO THEN PROGRAMS, ILAS WITH THE FEDERAL GOVERNMENT RELATED TO ENVIRONMENTAL CLEANUP
IT'S REALLY ACTUALLY AN INTERESTING DOCUMENT AND SO IT WAS QUITE HELPFUL FOR ME TO GO THROUGH THAT
AND SO I APPRECIATE THE EFFORT AND I THINK IT WILL BE INFORMATIVE FOR COMING YEARS CONSIDERATIONS AND AN AUDIT PLANS, ESPECIALLY THE HIGHER RISK RANKED ITEMS SO I APPRECIATE THAT
WITH THAT, COMMISSIONER BOWMAN DO YOU HAVE ANY QUESTIONS OR COMMENTS? I GUESS MOSTLY JUST A COMMENT
ESPECIALLY APPRECIATE GLENN THE WORK LOOKING INTO THE FEMA REIMBURSEMENT
I WAS UNAWARE THAT NUMBER ONE OF THE OPPORTUNITY OR NUMBER TWO THAT YOU ALL HAD BEEN TAKING A LOOK AT THAT
SO I'M GUESS I'M EXCITED AND INTERESTED TO HEAR FROM THE EXECUTIVE DIRECTOR
WHAT WE WILL BE PURSUING
YOUR CHARGES A GOOD ONE
I KNOW THAT PARTICULARLY ON CONSTRUCTION THERE ARE MANY MANY CONSTRUCTION RELATED ITEMS THAT THE PORT IS FACING NOT JUST-- SO I WAS CURIOUS
I DON'T KNOW IF YOU WANT TO TALK ABOUT IT NOW OR I CAN JUST ASK FOR A FOLLOW-UP
IS THERE ANYTHING BESIDES JUST THE ITEMS LISTED THAT ARE REIMBURSABLE FOR EXAMPLE JUST DELAYS IN PROJECTS? WOULD ANY OF THAT BE REIMBURSABLE UNDER FEMA? I UNDERSTAND WHY IT MIGHT NOT BE BUT I'M JUST CURIOUS BECAUSE I KNOW THAT THAT'S GOING TO BE A DRIVER OF PORT COSTS MOVING FORWARD
YEAH
COMMISSIONER BOWMAN AT THIS POINT THE DELAYS THEMSELVES, YOU KNOW, THE FEMA ISN'T KEEN OF PICKING UP
FROM DISCUSSIONS WITH THEM, THEY WERE FOCUSING MORE ON IF YOU HAVE SPECIFIC SAFETY RELATED THINGS THAT YOU'RE IMPLEMENTING RIGHT NOW THAT ARE INCREMENTAL, THEY HAVE TO BE INCREMENTAL, THEN WE'LL ENTERTAIN THOSE AND YOU CAN SUBMIT FOR THOSE AND POTENTIALLY REIMBURSE YOU FOR THEM
SO I STILL THINK THERE'S A LOT OF MONEY ON THE TABLE
THERE'S A FEW MILLION DOLLARS THERE ON THE CONSTRUCTION SIDE, YOU KNOW, THAT POTENTIALLY MIGHT NOT HAVE BEEN PURSUED IF WE DIDN'T INITIATE AND TRY TO ASSIST THERE, BUT WE CAN DEFINITELY HAVE FOLLOW-UP DISCUSSIONS IF YOU'D LIKE
GLENN ONE MORE QUESTION IF I MAY AND IF YOU CAN MUTE YOURSELF, THANK YOU
IS IT ALLOWABLE OR COULD YOU LOOK TO FEMA TO SEE IF IT'S ALLOWABLE FOR THE PORT TO PURCHASE PUBLIC SAFETY EQUIPMENT MOVING FORWARD NOT NECESSARILY CONSTRUCTION-RELATED
SAY FOR EXAMPLE, IF THE PORT WERE TO MOVE IN THE DIRECTION OF TEMPERATURE CHECKS FOR PASSENGERS, THAT EQUIPMENT WE UNDERSTAND CAN BE RATHER EXPENSIVE
MIGHT THAT BE AN ITEM THAT FEMA WOULD REIMBURSE FOR? I THINK THE QUICK ANSWER IS YES TO THAT COMMISSIONER BOWMAN
I THINK FEMA SHOULD REIMBURSE US FOR THAT, BUT WE CAN FOLLOW UP
WE'LL FOLLOW UP WITH THEM AND CONFIRM
BUT I THINK THAT THE ANSWER, THE SHORT ANSWER IS YES
THAT IS IN THE SCOPE OF WHAT THEY REIMBURSE FOR
EXCELLENT
THANK YOU FOR CONFIRMING
GREAT QUESTION COMMISSIONER BOWMAN AND CHRIS, DO YOU HAVE ANY QUESTIONS THAT QUESTIONS BUT I THINK IT'S GREAT THAT THE AUDIT DEPARTMENT HAS BEEN ADDING VALUE IN OTHER WAYS AS THEY CAN'T DO THE NORMAL AUDIT WORK IN A CRISIS LIKE THIS
I REALLY AM HAPPY TO SEE PROJECTS LIKE THIS GOING ON
AGREED
GLEN
I'LL TURN IT BACK TO YOU FOR THE NEXT PORTION OF YOUR PRESENTATION
NEXT SLIDE, PLEASE
COMMISSIONERS THE NEXT AUDIT THAT WE'RE GOING TO TALK ABOUT IS CASH CONTROLS
THERE'S NOT A LOT OF CASH THAT WE RECEIVED IN THE REPORT
WELL, IT'S ALL RELATIVE
SO IT DEPENDS BUT THE INHERENT RISK OF CASH IS HIGH SO ONE OF THE THINGS WE DECIDE TO DO AND WE'VE ADDED TO THE PLAN WAS [INAUDIBLE] THROUGHOUT THE PORT
WE HAD SOME ISSUES AT THE AIRPORT PARKING GARAGE EARLIER THIS YEAR
SO WE DECIDED TO LOOK AT CASH THROUGHOUT THE PORT, AT FISHERMAN'S TERMINAL, AT SHILSHOAL, AT THE AIRPORT, LOST AND FOUND, OTHER AREAS AS WELL
BUT WITH THE FOCUS ON MARITIME: FISHMANS TERMINAL, SHILSHOAL, AND THE AIRPORT LOST AND FOUND PRIMARILY BECAUSE THEY APPEAR TO BE HIGHER RISK
YOU KNOW, ALSO THE RCWS HAVE, JUST BECAUSE OF THE INHERENT RISK OF CASH, ARE VERY STRICT WITH CASH LOSS AND CASH MANAGEMENT AND REQUIRE US TO REPORT ANY CASH LOSS TO THE STATE AUDITOR
SO HAVING STRONG INTERNAL CONTROLS ESPECIALLY FOR CASH IS VERY IMPORTANT
SO OUR RECOMMENDATIONS ARE COMMISSIONER AND MISS GOERKE FOR ESSENTIALLY ENHANCING CONTROLS AT THE MARINAS AND I BELIEVE KENNY LYLES IS GOING TO SPEAK ABOUT CONTROLS THAT HE'S PUTTING IN AND ACTIONS THAT HE'S TAKING SO LAUREN IF YOU COULD UNMUTE KENNY LYLES AND MOVE TO THE NEXT SLIDE, HE'LL TALK A LITTLE BIT ABOUT-- YEAH, I'LL MUTE YOU THERE AND LET ME GO GET KENNY
ALL RIGHT, KENNY
YOU SHOULD BE GOOD TO GO
CAN YOU HEAR ME LAUREN? YES, WE CAN
EXCELLENT
GOOD AFTERNOON, COMMISSIONER BOWMAN AND COMMISSIONER CALKINS AND MISS GOERKE
AND GLENN THANK YOU VERY MUCH FOR SETTING THIS UP
FOR CONTEXT I AM THE DIRECTOR OF MARITIME OPERATIONS AND SECURITY AND WHAT THAT REPRESENTS ARE FOUR LINES OF BUSINESS: REC BOATING, COMMERCIAL FISHING, MARITIME OPERATIONS, AND SECURITY AND OUT OF THOSE FOUR LINES OF BUSINESS TWO OF THOSE LINES TRANSACT CASH AND THUS WE HAVE THE AUDIT, THE INTERNAL AUDIT REPRESENTED BY GLENN'S TEAM
FIRST AND FOREMOST
I ACCEPT, WE AS A BUSINESS DEPARTMENT, ACCEPT THE FINDINGS AND I WOULD LIKE TO SAY AS A FOLLOW-UP TO GLENN'S OBSERVATION IS THAT EVEN THOUGH WE HAVE NOT BEEN IDENTIFIED AS HAVING ANY REVENUE LEAKAGE SO TO SPEAK THROUGH OUR EXISTING OR PREVIOUS PRACTICES, WE DO ACCEPT THE RESPONSIBILITY AND THE ACKNOWLEDGEMENT THAT THERE ARE VULNERABILITIES IN THE WAY THAT WE HAVE MANAGED OUR REVENUES OVER THE TIME, SO I'M RESPONSIBLE FOR THE REVENUE CONTROL AND THE ADMINISTRATION OF THE REVENUE CONTROL PROCESSES FOR THE BUSINESS UNITS THAT WE'RE TALKING ABOUT TODAY
I CAN TELL YOU THAT FISHERMAN'S TERMINAL IS THE HOME PORT OF THE NORTH PACIFIC FISHING FLEET
IT'S THE FIRST ASSET COMMISSIONED BY THE PORT OF SEATTLE OVER 100 YEARS AGO IN 1914
THE FISHING FLEET IS GEARING UP FOR SALMON SUMMER FISHERY UP IN ALASKA SO THERE'S A A LOT OF ACTIVITY THERE
I WILL ALSO SAY THAT SHILSHOAL BAY MARINA IS OUR FLAGSHIP RECREATIONAL BOATING FACILITY AND HAS OVER 1,000 CUSTOMERS, 1430 TO BE EXACT
AND IN THAT GROUP IS REPRESENTED BY OVER 600 LIVE-ABOARD CUSTOMERS
SO IN BOTH LOCATIONS, YOU DO SEE YOU HAVE SEEN CASH TRANSACTIONS AND THROUGH THE AUDIT PROCESS WE ARE REFINING THOSE TRANSACTIONS TO COMPLY WITH THE RECOMMENDATIONS FROM THE INTERNAL AUDIT TEAM
SO OUT OF THE AUDIT THE INTERNAL AUDIT THREE CONTROL GAP MEASURES WERE IDENTIFIED AND EVEN THOUGH THESE CUSTOMER BASES ARE DIAMETRICALLY DIFFERENT ONE BEING RECREATIONAL BOATING THE OTHER BEING COMMERCIAL FISHING THE REVENUE CONTROL PROCESSES, THEY ARE SIMILAR
SO IN THE INTEREST OF TIME, I'M GOING TO TALK ABOUT THE SIMILARITIES AND THE RESPONSES AND THERE ARE SOME DIFFERENCES, HOWEVER, AND I WILL POINT THOSE OUT
THERE'S A FEW DIFFERENCES THAT I WILL POINT OUT
SO LET'S START OUT WITH FISHERMEN'S TERMINAL AND CONTROL GAP NUMBER ONE STATES THAT FISHERMAN'S TERMINAL MANAGEMENT SHALL IMPLEMENT A TWO PERSON RECEIPT AND VALIDATION PROCESS FOR CHECKS AND CASH
SO FISHERMAN'S HAS DISCONTINUED THE PERSON-TO-PERSON RECEIPT OF MOORAGE AND STORAGE PAYMENTS AFTER HOURS
CUSTOMERS WHO DESIRE TO PAY AFTER HOURS WILL BE PROVIDED AN ENVELOPE TO PAY USING THE OVERNIGHT DROPBOX
ADDITIONALLY ALL DAILY DEPOSITS WILL BE VALIDATED USING A TWO-PERSON PROCESS: ONE STAFF AND ONE MANAGER
AND SIMILARLY, SHILSHOAL BAY MARINA, WE WILL NO LONGER RECEIVE PAYMENTS AFTER HOURS
AND HISTORICALLY WE'VE DONE THAT
OUR HARBOR SPECIALISTS WERE RECIPIENTS OF CASH PAYMENTS AFTER HOURS
THAT'S NO LONGER OCCURRING
SO CONTROL GAP NUMBER TWO REFERENCES BOTH LOCATIONS AND WHAT CONTROL GAP NUMBER TWO STATES IS THAT NO MANAGERS APPROVAL FOR ADJUSTMENTS IN GENERAL OVERRIDES EXCEPT FOR ACCOUNT CREDIT
SO BASICALLY UP UNTIL THE RECOMMENDATIONS FROM INTERNAL AUDIT, WE DID NOT HAVE MANAGERS AUTHORIZING OVERRIDES
AND SO THE INFORMATION COMMUNICATIONS AND TECHNOLOGY DEPARTMENT, OUR ICT CLIENT TEAM HAS TAKEN STEPS TO MODIFY PERMISSIONS IN OUR EXISTING MARINA MANAGEMENT SYSTEM PLATFORM
EFFECTIVE IMMEDIATELY, WRITTEN GUIDANCE HAS BEEN PROVIDED TO ALL EMPLOYEES INDICATING THAT OVERRIDES MUST BE ACCOMPLISHED BY A MANAGER OR SUPERVISOR
ADDITIONALLY MONTHLY REVIEWS WILL BE CONDUCTED BY MANAGEMENT TO VALIDATE COMPLIANCE
THIS FUNCTION HAS BEEN ELEVATED TO A MANDATORY FUNCTION IN OUR VESSEL MANAGEMENT SYSTEM
NOW THAT CONTROL GAP MEASURE NUMBER TWO APPLIES TO BOTH LOCATIONS
AND CONTROL GAP NUMBER THREE, NO CASH HANDLERS ID IDENTIFICATION IS IN THE SYSTEM OR PHYSICAL DOCUMENTATION IS PROVIDED
SO AS A RESPONSE, WE'VE DEVISED AN ELECTRONIC STAMP THAT'S BEEN CREATED TO PROVIDE SIGNATURE BLOCKS ON THE RECONCILIATION SHEETS PROVIDED BY THE MARINA MANAGEMENT SYSTEM
EACH EXPLANATION WILL BE REVIEWED BY A SENIOR MANAGER AND DEPARTMENT DIRECTOR
FURTHERMORE INTERNAL AUDITS RECOMMENDATION TO DISCONTINUE CASH COLLECTION FOR SHOWERS WILL BE REVIEWED DURING THE NEXT TARIFF 6 REVIEW
NOW
THIS IS ONE ITEM THAT YOU DO SEE DIFFERENCES IN THAT WE DO COLLECT SHOWER COINS AT FISHERMAN'S TERMINAL HOWEVER THEY HAVE NOT BEEN DEPOSITED ON A WEEKLY BASIS AND THAT'S BECAUSE FISHERMAN'S TERMINAL HAS A CUSTOMER BASE THAT IS SEASONAL
AND LIKE WHERE WE ARE TODAY AND THIS SPRING WHERE THE FISHERS HAVE RETURNED AND THEY'RE UTILIZING THE FACILITY IN PREPARATION FOR THE UPCOMING FISHERY WE'RE SEEING A LOT MORE USE OF OUR CUSTOMER SERVICE FACILITIES AT FISHERMAN'S TERMINAL INCLUDING THE SHOWERS THAT ARE COIN OPERATED SO WE ARE INCREASING THOSE DEPOSITS TO REPRESENT THAT
HOWEVER COIN PAYMENT COLLECTION BOXES FOR THE SHOWERS AT SHILSHOAL MARINA HAVE BEEN REMOVED
THIS HAS ELIMINATED THE NEED TO COLLECT SHOWER COINS
AND WHEN WE COMPLETE THE NEWLY CONSTRUCTED CUSTOMER SERVICE FACILITIES LATER THIS YEAR
WE'RE EXPLORING NEW WAYS FOR ALTERNATIVE PAYMENT METHODS TO ELIMINATE THE ONGOING THEFT AND VANDALISM THAT WE'VE EXPERIENCED AT SHILSHOAL BAY MARINA AT THESE PAD POINT MACHINES
SO WE ARE ADDRESSING EACH OF THESE CONTROL GAAP MEASURES AND WITH THAT I'D LIKE TO OPEN IT UP TO ANY QUESTIONS THAT YOU MAY HAVE
THANK YOU, KENNY
COMMISSIONER BOWMAN, ANY QUESTIONS? NO QUESTIONS, JUST TO COMMENT THAT KENNY I APPRECIATE THE MANAGEMENT RESPONSE AND THE STEPS THAT YOU'VE TAKEN AND I KNOW THAT YOU KNOW, THE SHOWER COINS HAVE BEEN A CONCERN FOR QUITE A WHILE SO APPRECIATE THESE ADDITIONAL CHANGES TO THE SYSTEM
THANK YOU
AND ANY QUESTION FROM CHRIS GOERKE? NOPE, NO QUESTIONS FOR ME
THANK YOU
OKAY
OKAY
WELL, THANK YOU COMMISSIONERS AND MISS GOERKE AND GLENN
THANK YOU, KENNY
THANKS, KENNY
COMMISSIONERS THE NEXT ITEM THAT WE HAVE IS AIRPORT LOST AND FOUND
AGAIN
NOT A LOT OF CASH, BUT SURPRISINGLY FROM APRIL TO DECEMBER OF LAST YEAR QUITE A BIT OF CASH WAS LOST AT THE AIRPORT AND 43 POUNDS WASN'T RETURNED, WASN'T ACCOUNTED FOR, RETURNED TO CUSTOMERS ESSENTIALLY
IT WAS DEPOSITED IN THE PORT'S ACCOUNT
I'M SORRY
28,000 WAS DEPOSITED FROM THE 43
SO QUITE A LARGE SUM OF CASH GETS LOST AND WE OUTSOURCE THIS TO HALLMARK AVIATION
HALLMARK MANAGES THE LOST AND FOUND AND THEY STAFF IT WITH THEIR STAFF
AND WHEN WE LOOKED AT THEIR POLICIES AND PROCEDURES HALLMARK HAD EXCELLENT DOCUMENTED POLICIES AND PROCEDURES
SO WE STARTED THERE BUT THEN WE FOUND THAT NONE OF THE STAFF WERE FOLLOWING THESE POLICIES AND PROCEDURES
SO NOT ONLY WERE THEY NOT FOLLOWING IT, THE DOCUMENTATION WAS IN MUCH NEED OF IMPROVEMENT AND WE WERE UNABLE TO TRACE CASH RECEIVED TO CASH RETURNED TO CUSTOMERS AND CASH DEPOSITED INTO THE PORT ACCOUNTS
SO THE RECORD-KEEPING AND FOLLOWING THE PROCEDURES WAS IMPORTANT TO THIS PORT PROCESS AND JIM PETERSON IS GOING TO TALK A LITTLE BIT ABOUT THE ACTION PLAN NEXT SO NEXT SLIDE, PLEASE
SO ESSENTIALLY OUR RECOMMENDATION WHICH WE'LL HEAR A LITTLE BIT ABOUT IS ENFORCE THE EXISTING PROCEDURES WITH STAFF THROUGH COMMUNICATION AND THEN MONITOR IT AND MAINTAIN DOCUMENTATION
SO WITH THAT LAUREN IF YOU COULD UNMUTE JIM YEAH, YEAH, OKAY, JIM
IT LOOKS LIKE YOU ARE UNMUTED
YES
GOOD AFTERNOON
GOOD AFTERNOON COMMISSIONERS AND AUDIT COMMITTEE
THIS IS JIM PETERSON
I'M THE SENIOR MANAGER OF CUSTOMER EXPERIENCE AT THE AIRPORT AND WE'D LIKE TO TAKE THIS OPPORTUNITY TO ADDRESS AND TO SPEAK TO THIS VALUABLE AUDIT THAT WAS CONDUCTED
I THINK IT WOULD BE BENEFICIAL TO THE GROUP AND TO THE AUDIENCE TO RECOGNIZE AND UNDERSTAND A LITTLE BIT ABOUT THE AIRPORT LOST AND FOUND
THE AIRPORT LOST AND FOUND IS TYPICALLY NOT ON THE FOREFRONT OF AWARENESS TO OUR CUSTOMERS NOR TO THE ORGANIZATION UNTIL YOU NEED THAT AND THAT IS YOU MAY BE LOSING SOMETHING OF HIGH VALUE OR SENTIMENTAL VALUE AS YOU JOURNEY THROUGH SEA AND THAT'S WHEN THE AIRPORT LOST AND FOUND COMES INTO VALUABLE PLAY FOR OUR CUSTOMERS
IT'S A VALUABLE SERVICE WHERE WE STRIVE TO BE GOOD STEWARDS TO OUR ROLE AND OUR RESPONSIBILITIES NOT ONLY TO THE STATE, THE RCW, BUT ALSO TO CUSTOMERS TO EFFECTIVELY MANAGE THE OPERATION AND MOST IMPORTANTLY RETURN LOST ITEMS TO THEIR OWNERS
SO GREAT APPRECIATION THIS LAST COUPLE MONTHS WORKING WITH GLENN AND HIS TEAM FOR THEIR EXPERTISE AND THE PARTNERSHIP DURING THE AUDIT PERIOD
IT RAISED SOME SOME GREAT INFORMATION AND INSIGHT INTO A NEW LENS FOR US TO VIEW THE OPERATION AND TO CHECK THE POLICIES AND THE PROCEDURES THAT WE PUT IN PLACE BACK BEGINNING IN APRIL 2019
THE REPORT HELP TO HIGHLIGHT AND IDENTIFY INCONSISTENCIES WHERE ESTABLISHED PROCEDURES WERE NOT ALWAYS BEING FOLLOWED
AND SO IT'S WITH THAT, AVIATION CUSTOMER SERVICE CONCURS WITH INTERNAL AUDITS RECOMMENDATIONS, AND WE HAVE OUTLINED THREE BULLET POINTS FOR THE ACTION PLAN THAT WE'VE ALREADY UNDER TOOK RIGHT AFTER THIS WAS PUBLISHED
THE THREE ACTION ITEMS THAT WE'RE LOOKING FORWARD TO COMPLETING IS: NUMBER ONE WORKING WITH HALLMARK AVIATION TO IDENTIFY THE ROOT CAUSES AS TO WHY THOSE EMPLOYEES WERE NOT FOLLOWING THE ESTABLISHED WRITTEN PROCEDURES
THAT WORK IS ALREADY UNDERWAY, AND WE'VE ASKED THEM TO COMPLETE THEIR REPORT IN 30 DAYS
SECONDLY, NEW RECONCILIATION REPORTS AND PROCESSES HAVE BEEN ESTABLISHED TO IDENTIFY AND TO HIGHLIGHT THE CURRENCY TRANSACTIONS
AND THEN THIRD ADDITIONAL OVERSIGHT IS NOW TAKING PLACE TO MONITOR WEEKLY AND REVIEW WEEKLY RECONCILING REPORTS
SO WITH THAT I'LL TAKE ANY QUESTIONS
NO QUESTIONS FOR ME
COMMISSIONER BOWMAN? HI, JUST BRIEFLY
THANK YOU FOR NUMBER ONE, THANK YOU TO GLENN FOR FOCUSING ON THIS AREA
I THINK IT'S UM, IT'S A SMALL PART OF THE AIRPORT BUT IS AN IMPORTANT ONE AND SO I APPRECIATE MR PETERSON YOUR YOUR COMMENTS AS WELL
I'M JUST CURIOUS
OBVIOUSLY THERE'S MANY MANY ITEMS SO AS I'M READING THIS A VOLUME OF 25,000 ITEMS THAT GO THROUGH LOST AND FOUND
WHAT HAPPENS IF YOU DON'T MIND ME ASKING WITH THE PHYSICAL ITEMS BESIDES CURRENCY? ITS I KNOW THAT THIS AUDIT IS FOCUSED ON THE CURRENCY, BUT YOU KNOW, I'VE HAD PHONES OTHER VALUABLES
WHAT HAPPENS TO THOSE THAT ARE NOT ABLE TO BE RETURNED TO THEIR OWNERS? GOOD VERY GOOD QUESTION COMMISSIONER
WELL, FIRST OF ALL, OUR ULTIMATE GOAL IS TO RETURN A HUNDRED PERCENT OF THOSE LAST ITEMS AND THAT'S NOT ALWAYS POSSIBLE AS AS YOU KNOW
SO OUR BENCHMARK, OUR GOAL IS TO ACHIEVE A 51 PERCENT OR BETTER RETURN RATE
FOR THOSE ITEMS THAT ARE NOT RETURNED LIKE JACKETS IN WINTER TIMES OR THE THE PILLOWS AND SO FORTH
WE'VE HAVE A LONG-STANDING PARTNERSHIP WITH SEATTLE'S CHILDREN'S HOSPITAL AND THAT HAS BEEN ON A MONTHLY BASIS ACCORDANCE TO THE RCW THEY RECEIVE THOSE ITEMS AND THEN THEY MANAGE THAT THROUGH THEIR NETWORK OF STORES AND THE PROCEEDS GO TO THAT NONPROFIT
NOW IN REGARDS TO CELL PHONES AND HIGH-VALUE ITEMS, THE PORT OF SEATTLE POLICE DEPARTMENT TAKES AN ACTIVE ROLE IN TAKING ANOTHER STEP IN KIND OF UNLOCKING THOSE ITEMS AND TRACKING DOWN-- A GREAT DEAL OF EFFORT GOES INTO TRACKING DOWN THE OWNERS
AND WHEN THEY'VE EXHAUSTED EVERY STEP THAT THEY CAN TAKE TO REUNITE THOSE ITEMS THEN THOSE ARE AUCTIONED OFF BY THE POLICE DEPARTMENT
AND THEN WHAT ABOUT OTHER ITEMS, I DON'T KNOW A WEDDING RING AND I MEAN OTHER ITEMS THAT ARE NOT ELECTRONIC? ARE ALL OF THOSE AUCTIONED OFF? NO THOSE ARE THERE JUST AN AMAZING ARRAY OF ITEMS THAT ARE LOST
I MEAN WE WILL HAVE A 55 INCH LCD TV TO YOU KNOW NUMEROUS JACKETS TO ITEMS OF YOU JUST NAME IT
AND THOSE ITEMS AGAIN ARE MANAGED THROUGH
LIKE FOR EXAMPLE-- EYEGLASSES
EYEGLASSES ARE DONATED TO, I FORGET THE NAME, I'M SORRY OF THE NONPROFIT ORGANIZATION BUT THE PRIMARY RECIPIENT AND PARTNER IN THIS IS SEATTLE CHILDREN'S HOSPITAL FOR THOSE ITEMS WHERE WE'RE UNABLE TO FIND THE OWNERS
CHRIS THANK YOU
CHRIS ANY QUESTIONS? NO QUESTIONS FROM ME
THANK YOU
PERFECT
THANK YOU JIM
OKAY
THANK YOU
GLENN OKAY, COMMISSIONERS, BEFORE I MOVE ON TO THE NEXT AUDIT
I ALSO WANT TO GIVE LAUREL DUNPHY THE OPPORTUNITY TO SPEAK TO YOU A LITTLE BIT ABOUT CONTROLS THAT HAVE BEEN PUT IN AT THE AIRPORT PARKING GARAGE
LAUREN IF YOU CAN UNMUTE LAUREL DUNPHY AND LAUREL, IF YOU'RE WILLING TO SPEND A COUPLE MINUTES TO ADDRESS TO PROVIDE THE COMMISSIONERS AN UPDATE ON AIRPORT PARKING GARAGE
CONTROLS PUT IN PLACE
YEAH, LAUREL HAS A LITTLE THING NEXT TO HER NAME THAT IT'S NOT LETTING ME UNMUTE HER
THAT'S A FUN NEW ONE
LAUREL, ARE YOU ABLE TO UNMUTE YOURSELF? I THINK IT HAS SOMETHING TO DO WITH HER AUDIO BEING CONNECTED TO A PHONE VERSUS THE DESKTOP AUDIO
I CANNOT UNMUTE THE PHONE BECAUSE THAT ONE IS NOT POPPING UP
SO WE CAN MOVE ON, IF LAUREL IS ABLE TO JOIN US LATER, I WILL MAKE IT KNOWN
LAUREL? CAN YOU HEAR ME NOW? LAUREL? YEP, WE CAN HEAR YOU
I JUST TOOK MY NOTES AWAY
BUT THANK YOU FOR THE OPPORTUNITY
GOOD AFTERNOON
EVERYONE APPRECIATE THE OPPORTUNITY
WE DID HAVE AN UNFORTUNATE SITUATION IN THE PARKING GARAGE WITH SOME LOSS OF CASH AND FORTUNATELY DUE TO SOME ACTIVITY BY SOME CASHIERS WHO ARE NO LONGER EMPLOYED BY THE PORT
AS A RESULT OF THIS AUDIT
WE HAVE PUT IN PLACE SEVERAL NEW FEATURES TO HELP US BETTER TRACK THE USE OF DISCOUNTS BY THE CASHIERS
SO NOW ALL CASHIER CODES ARE RECORDED
WE GET A REPORT THAT ICT HAS DEVELOPED FOR US AND THAT WILL GIVE US THE AMOUNT OF CASH DISCOUNTS THAT ARE OFFERED BY A CASHIER DURING THEIR WORKING PERIOD THIS IS AUDITED REGULARLY BY THE PARKING MANAGEMENT STAFF
WE'VE ALSO INCREASED OUR ABILITY TO REVIEW VIDEO FOOTAGE OF THE CASHIER LANE
WHILE WE HAD ONLY HAD A PERIOD OF TWO WEEKS, WE NOW CAN SEE THAT FOR UP TO SIX MONTHS SHOULD WE HAVE QUESTIONS ABOUT ANY TRANSACTIONS IN THE BOOTH
WE ARE ALSO PARTNERING WITH THE FINANCE TEAM TO HAVE MORE REGULAR REPORT ON OUR OVERALL CASH ACTIVITY
SO WE KEEP IT A HIGH-LEVEL LOOK AT THAT AS WELL
AND THEN WE'RE MOVING FORWARD WITH DIFFERENT TICKETING OPPORTUNITIES OR PAY OPPORTUNITIES LIKE APPLE AND GOOGLE PAY AND THOSE ARE PART OF THE FUTURE OF THE PARKING GARAGE SO ALL OF THOSE THINGS WILL HELP ENSURE THAT THIS DOESN'T HAPPEN AGAIN
EXCELLENT
WE LOST GLENN'S AUDIO THERE
SORRY I WAS MUTED
NOW I'M NOT
SO EQUIPMENT ACQUISITION MONITORING
THIS AUDIT WAS ESSENTIALLY BECAUSE THE HOTLINE COMPLAINT ON ASSETS AT THE FIRE DEPARTMENT
RELATIVELY SMALL ASSETS, BUT YOU KNOW, NONETHELESS WE WENT IN AND LOOKED AT WHAT THEY WERE DOING, THEIR POLICIES AND PROCEDURES
NEXT SLIDE PLEASE WE DID GO THROUGH ALL THE COMPLAINTS THAT WERE LISTED
THERE WAS A WHOLE SERIES OF THEM AND MOST OF THEM WE WERE ABLE TO FIND THE ASSETS OR TRACK THEM DOWN OR YOU KNOW IDENTIFY THE VALUE OF THOSE ASSETS WITH MINIMAL [INAUDIBLE]
I THINK WHAT WE CONCLUDED WAS THERE WERE A COUPLE THAT WE COULDN'T IDENTIFY AND WE SAID OKAY
WELL, MAYBE, YOU KNOW, WE LOOKED AT THE VALUE AND THEY'RE REALLY OLD ITEMS FROM THE 80S THAT MOST LIKELY CHIEF KRAUSE'S TEAM WAS JUST TRY TO CLEAN HOUSE AND THEY DID CERTAIN THINGS, PORT POLICIES AC 1314 WEREN'T FOLLOWED
BASICALLY DOCUMENTATION AND SOME THINGS
BUT YOU KNOW WE CONCLUDED THAT MOST ITEMS THAT WERE RAISED IN THE COMPLAINT WERE WITHOUT MERIT
NEXT SLIDE, PLEASE
I'M GONNA ACTUALLY TALK THROUGH THE NEXT ISSUE AS WELL, SO AND THEN I'LL HAND IT BACK TO CHIEF KRAUSE
SO LET'S MOVE FORWARD
LAUREN, ONE MORE
WE ALSO NOTED AN OPPORTUNITY DURING THIS FOR THE FIRE DEPARTMENT TO WORK WITH FINANCE TO JUST ENHANCE THEIR TRACKING, DISPOSAL, OF SMALL AND ATTRACTIVE ASSETS
SMALL AND ATTRACTIVE ASSETS ESPECIALLY SINCE WE HAVE A LOT OF THOSE
IT'S HOW DO WE BETTER FOLLOW PORT PROCEDURES? MY PHONE IS GOING OFF HERE
ANYWAYS, SO WITH THAT, YOU KNOW AGAIN A SMALL OPPORTUNITY
WHILE WE'RE IN THERE DOING THE AUDIT WE IDENTIFIED SOME SMALL OPPORTUNITIES FOR IMPROVEMENT, BUT I WANT TO HIGHLIGHT THAT CHIEF KRAUSE IS VERY SUPPORTIVE AND HELPFUL
HE MADE EVERYTHING AVAILABLE TO US AND WE FOUND LIKE I SAID THAT THE ALLEGATIONS THAT WERE BROUGHT FORTH WERE WITHOUT MERIT
NEXT SLIDE, PLEASE
AND YEAH THIS HIGHLIGHTS OUR RECOMMENDATIONS WHICH CHIEF KRAUSE IS GOING TO TALK THROUGH
SO IF YOU CAN MOVE TO THE NEXT SLIDE AND UNMUTE CHIEF KRAUSE AND MUTE ME AND
ALL RIGHT GLEN YOU ARE MUTED AND NOW I'M GOING TO FIND CHIEF KRAUSE
ALL RIGHT, YOU SHOULD BE UNMUTED AND CAN BEGIN
ALL RIGHT, THANK YOU
LAUREN
FIRST I WANT TO SAY THANKS TO GLENN AND NIKITA AND SPENCER
THEY WERE AMAZING
AS HE INFORMED YOU THIS WAS FROM A HOTLINE COMPLAINT
THEY WERE VERY PROFESSIONAL
THEY DID THEIR DUE DILIGENCE AND I REALLY HAVE A GREAT DEAL OF RESPECT FOR THE INTERNAL AUDIT TEAM AND AS I'VE TOLD GLENN AND I'VE PASSED ON TO OTHERS, I REALLY APPRECIATE THIS IS ONE OF THOSE
IT'S THE PORT LOOKING AT THE PORT SO I REALLY APPRECIATE EVEN THOUGH HOW THIS CAME ABOUT MAY HAVE BEEN A BIT UNCOMFORTABLE, IT DEFINITELY PRODUCED THE RESULTS THAT I WOULD WANT AS THE LEADER OF THE TEAM TO HAVE THEM RECOGNIZE IT WE WERE NOT FOLLOWING A C-13 AND AC 14 AT THE TIME AND SINCE THEN WE'VE IMMEDIATELY IMPLEMENTED THE PROCESS
WE'VE IMPROVED OUR PROCESSES GREATLY
AND IT MAINLY IT'S FROM AWARENESS OF WHAT THE TEAM HAD BROUGHT TO OUR ATTENTION
SO WHEN WE DISPOSITION, SURPLUS OR TRANSFER ASSETS, WE FOLLOW AC 13 AND 14
AND ONE OF THE THINGS THAT WE ARE ALSO INVOLVED WITH RIGHT NOW IS THE ASSET CHARTER TEAM, WHICH IS REALLY LOOKING AT ASSETS AND TRYING TO BECOME MORE CONSISTENT ACROSS ALL LINES OF BUSINESS AND HOW WE MANAGE ASSETS
I'M REALLY HAPPY TO BE PARTICIPATING WITH THAT TEAM
MYSELF IN MY ADMIN SUPERVISOR, ERICA RAMOS ARE INVOLVED WITH THAT
SO IT'S BEEN A ENLIGHTENING EXPERIENCE AND SO ALL ALONG THE WAY WE PLAN ON STAYING COMPLIANT AND IMPROVING OUR PROCESSES AS THEY MODIFY AND CHANGE AS WE DO THROUGH THIS ASSET CHARTER TEAM
SO ONE OF THE THINGS THAT WAS RECOGNIZED IN THE AUDIT IF I CAN SAY
IS THAT ONE OF THE THINGS THAT WE DO REALLY REALLY WELL AT THE FIRE DEPARTMENT IS ON THE FRONT SIDE OF IT
ONE OF OUR ADMIN ASSISTANTS, ANNA BOUDIN IS PHENOMENAL AT THE PURCHASING SIDE AND TRACKING THE PURCHASING AND MAKING SURE THAT WE'RE COMPLIANT WITH PURCHASING AND ASKING ALL THE APPROPRIATE QUESTIONS TO CPO IN REGARDS TO THAT
SO WHAT WE'VE DONE IS I HAVE ERICA RAMOS AND ANNA LOOKING AT THE OPPORTUNITY OF ONE OF THEM BEING THE CUSTODIAN FOR US AND IT'S PROBABLY GOING TO BE ERICA IN REGARDS TO THAT
SO THAT'S ALREADY IN PLACE AND WE'RE ACTUALLY MEETING NEXT WEEK TO FINALIZE SOME OF OUR ACTIONS AND WE HAD PLANNED ON PURCHASING A SOFTWARE THAT MARINE MAINTENANCE IS CURRENTLY USING BUT WE PUT THAT ON HOLD AS PART OF A COST-SAVING MEASURE
SO WE'RE GOING TO BE USING MASS MAXIMO TO TAG OUR ASSETS AND WE'RE TRYING TO GET THAT UP AND RUNNING SO THAT WE CAN IDENTIFY ALL OF OUR INVENTORIES AND ONE OF THE THINGS I TALK TO GLENN AND SPENCER ABOUT WAS NOT ONLY THOSE ASSETS UNDER $5,000 AT THE FIRE DEPARTMENT, I HAVE CHAINSAWS AND CIRCULAR SAWS AND PRETTY CRITICAL EQUIPMENT THAT ARE ATTRACTIVE UNDER THAT COST DOLLAR AMOUNT
WE'RE GOING TO ALSO TRACK AND MONITOR THOSE AS WELL
I THINK THAT'S THAT FOR THIS SLIDE
AND TWO THINGS THAT WE HAVE IN THE WORKS
SO WE PLAN ON THE RECOMMENDATION, WHICH WE DO AGREE WITH, IS WE HAVE A TOOL ROOM THAT OUR MECHANICS STAGE A LOT OF PARTS FOR OUR VEHICLES AND WE HAVE A TRAINING SUPPLY ROOM THAT ALSO HAS SOME SMALL AND ATTRACTIVE ASSETS
WE'RE GOING TO SECURE THE BOTH OF THOSE DOORS WITH INTELLIKEYS SO THAT WE CAN TRACK AND MONITOR ACCESS IN AND OUT OF THOSE ROOMS AND THEN WE PLAN TO ALIGN OUR POLICIES AND PROCEDURES THAT ARE OUTSIDE OF OR IN ADDITION TO AC 13 AND 14 THEN EF 1 AND 2 WHEN THEY COME ABOUT WE'RE GOING TO HAVE INTERNAL POLICIES THAT EITHER REFER TO THEM OR ARE ENHANCED BECAUSE OF SOME OF THE SMALLER DOLLAR VALUE TOOLS THAT WE KNOW THAT WE SHOULD BE TRACKING
WE'RE GOING TO GO AHEAD AND IMPLEMENT THAT THROUGH POLICY THAT'S NOT IDENTIFIED IN THE OTHER POLICIES BUT IMPORTANT FOR US TO HAVE A PROCESS FOR
WITH THAT COMMISSIONERS BOWMAN, CAULKINS, OR CHRIS GEORKE, ANY QUESTIONS? THANK YOU CHIEF KRAUSE
IT SEEMS LIKE YOU'VE RESPONDED FULSOMELY TO THE FINDINGS AND I APPRECIATE THAT WE DID WE RESPONDED TO A HOTLINE COMPLAINT WITH A COMPLETE INVESTIGATION AND EXCELLENT RESPONSE FROM THE EFFECTED DEPARTMENT
SEEMS LIKE THIS WHOLE PROCESS WENT SMOOTHLY
COMMISSIONER BOWMAN? NO QUESTIONS
THANKS CHIEF
CHRIS? NO QUESTIONS FOR ME
THANK YOU AND IF I MAY, I CAN'T REITERATE ENOUGH HOW APPRECIATIVE I AM FOR GLENN AND HIS TEAM
THEY DID A GREAT JOB IN THIS CASE
I REALLY APPRECIATE THE WORK THEY DID
THANK YOU
THANK YOU CHIEF
ALL RIGHT GLENN BACK TO YOU
THANK YOU CHIEF
NEXT SLIDE, PLEASE LAUREN
SO THE NEXT AUDIT WE'VE GOT TWO MORE
THEY'LL BE RELATIVELY LIGHT
THE SERVICE CHANNEL WE CAPITAL OUT AT THE SERVICE TUNNEL AND THE SERVICE TUNNEL IS ESSENTIALLY A TUNNEL UNDER THE AIRPORT THAT LOTS OF SUPPLIES RUN THROUGH
YOU KNOW, IT WAS SEISMICALLY UNSTABLE
SO IT HAD TO BE REWORKED AND WE WE STRENGTHENED I GUESS WOULD BE THE WORD TO PUT
SO JAMES FOWLER WAS A COMPANY THAT WAS SELECTED FOR IT, FOR THE WORK AND THEY'VE BEEN WORKING ON THE PROJECT SINCE BACK IN 2017
SO IT'S YOU KNOW, PRETTY MUCH NEAR COMPLETION OF THIS POINT
NEXT SLIDE, PLEASE
SO WE LOOKED AT QUITE A LOT OF THINGS ON THIS AND I WANT TO HIGHLIGHT THAT EVERYTHING WILL CHECK OUT
THE AUDIT DIDN'T HAVE ANY ISSUES AND I'M NOT GOING TO ASK FOR A RESPONSE FROM MANAGEMENT IN THIS BECAUSE THERE WEREN'T ANY ISSUES
WE DID NOTE THAT THERE WAS A
THE SERVICE TUNNEL DID DEPEND ON THE ANOTHER PROJECT, THE IAF, TO BUILD THE BUS TURN AROUND BUT SINCE THAT PROJECT WAS DELAYED THE CONTRACTOR HAD TO BUILD A BUS TURN AROUND TO GET THE BUSES TO TURN AROUND
THAT RAN US A LITTLE EXTRA MONEY
AND IT'S JUST SOMETHING WE WANTED TO NOTE THAT ESSENTIALLY ONE PROJECT SLIPS, IT COSTS ANOTHER PROJECT
ANOTHER IMPORTANT THING IS WHEN ALL SAID AND DONE AND THE IAF IS DONE, IF THEY DON'T HAVE TO BUILD A TURN AROUND AND THERE'S POTENTIALLY A DEDUCTION CHANGE ORDER OR IF THEY DO, YOU KNOW, THIS OLD TURN AROUND, THERE'S PROBABLY STILL SOME DEDUCT CHANGE ORDERS THAT THEY TO BE WORKED OUT, BUT THAT'LL BE YEARS DOWN THE ROAD, BUT WE JUST WANT TO DOCUMENT IT FOR NOW AND YOU KNOW AND NOTE IT
NO ISSUES HERE
SO I'M GOING TO KIND OF MOVE FORWARD ON THE NEXT AUDIT
THE NEXT AUDIT IS NETWORK PASSWORD MANAGEMENT
WE'RE GOING TO TALK ABOUT THIS AND HOW SECURITY SENSITIVE IN A, I GUESS IT'S NOT A PUBLIC SESSION
IT'S NOT CONSIDERED EXECUTIVE SESSION PER SE
NEXT SLIDE, PLEASE
AND THE FINAL AUDIT WAS ON MCDONALD'S
IT'S A CONCESSIONAIRE AT THE AIRPORT
AS YOU CAN SEE MCDONALD'S MOST RECENT YEAR WAS PULLING IN ABOUT 9 MILLION IN SALES A YEAR
SO QUITE A BIG OPERATION
I'M SURE IT'S SUBSTANTIALLY DOWN RIGHT NOW, BUT DURING THE TIME OF THE AUDIT THE REVENUES AND PERCENTAGE FEES FOR VERY LARGE
NEXT SLIDE PLEASE
WE DID NOTE ONE MINOR, ONE SMALLER ISSUE
IT WAS, IT JUST RECOUPED BY $10,000 FOR THE PORT AND IT WAS PRIMARILY BECAUSE NON PRODUCT SALES ARE NOT BEING BILLLED CORRECTLY BY THE PORT
THERE WAS A LATE FEE AT SMALL
ON NON- PRODUCT SALES, I WANT TO NOTE THAT MCDONALD'S WAS PAYING THE AMOUNT WE WERE JUST NOT RECORDING IT RECORDING IT CORRECTLY
SO WE WERE PUTTING IT BACK AS A CREDIT BALANCE IN THEIR ACCOUNT
AND ITS A SMALL AMOUNT BUT STILL $10,000 THAT THE PORT GETS BACK
NEXT SLIDE, PLEASE
SO WE'RE RECOMMENDING AND AFR AND YOU KNOW, THE ADR TEAM HAS STARTED THE PROCESS TO COLLECT THIS AND TO FIX-- MOST OF THOSE JUST ON OUR SIDE WHERE WE FIX THE BILLING AND THAT'S BEEN ADDRESSED AS WELL ALREADY
SO NEXT SLIDE, PLEASE
NOTHING ELSE IN THIS AUDIT
THAT IS THE MANAGEMENT RESPONSE SAYING THEY'LL GET THEIR LATE FEE AND CORRECT THE BILLING
I DON'T HAVE ANYTHING ELSE FOR THIS AUDIT COMMITTEE MEETING
SO I WILL PASS IT BACK TO COMMISSIONER CALKINS FOR ANY QUESTIONS ON THE LAST COUPLE AUDITS AND CLOSE IT
THANK YOU GLENN
AT THIS TIME
I'M GOING TO PROVIDE COMMISSIONER BOWMAN AN OPPORTUNITY TO RAISE ANY ADDITIONAL QUESTIONS ON THE LAST TWO PORTIONS OF THE PRESENTATION AND THEN ANY CONCLUDING REMARKS TO THE MEETING AND THEN I'LL PASS IT TO YOU CHRIS
COMMISSIONER BOWMAN? GREAT, THANK YOU
NO COMMENTS ON THE LAST TWO ITEMS ONLY JUST WANTED TO SAY THANK YOU SO MUCH TO THE STAFF FOR YOUR TRANSPARENCY AND MAKING THIS MEETING AVAILABLE TO THE PUBLIC
I KNOW IT'S A LOT OF EXTRA WORK, BUT YOU GUYS HAVE DONE A PHENOMENAL JOB
AND THANK YOU TO GLENN AND HIS TEAM
CHRIS? I HAVE NO FURTHER COMMENTS OR QUESTIONS
THANKS
OKAY
THANK YOU
THAT CONCLUDES TODAY'S PUBLIC AGENDA
AND HEARING NO FURTHER COMMENTS, AT THIS TIME WE WILL NOW ADJOURN TO THE NON-PUBLIC PORTION OF OUR MEETING TO DISCUSS ONE MATTER RELATED TO COMPUTER AND TELECOMMUNICATION SECURITY
THE TIME IS NOW 3:07 P.M.

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