The Audit meeting scheduled for 2020-06-11 at Remote

Transcript

The Audit meeting scheduled for 2020-06-11 at Remote

THIS IS COMMISSIONER CALKINS CALLING TO ORDER THE PORT OF SEATTLE AUDIT COMMITTEE MEETING
TODAY IS THURSDAY, JUNE 11TH
AND THE TIME IS 1:02 P.M
WE ARE MEETING REMOTELY TODAY VIA SKYPE TO COMPLY WITH THE GOVERNOR'S STAY-AT-HOME ORDER AND IN ACCORDANCE WITH PROCLAMATION 2028
COMMITTEE MEMBERS PRESENT WITH ME TODAY ARE COMMISSIONER BOWMAN AND PUBLIC MEMBER CHRISTINA GERKE
I'LL ASK THAT WE DO A ROLL CALL OF COMMITTEE MEMBERS TO ENSURE EVERYONE IS ON THE LINE
IS COMMISSIONER BOWMAN THERE? I'M PRESENT
THANK YOU COMMISSIONER BOWMAN
AND HOW ABOUT CHRISTINA GERKE? I JUST SENT THE UNMUTE PROMPT
LET ME SEE IF I NEED TO DO IT AGAIN
HANG ON
SORRY
PERFECT
YOU THERE CHRIS? ALRIGHT, SO TODAY'S MEETING IS ORGANIZED A BIT DIFFERENTLY FROM OTHER MEETINGS
WE'VE MADE SPECIAL ARRANGEMENTS TO PROVIDE FOR REMOTE PARTICIPATION FOR ALL OF OUR STAFF, OUTSIDE PRESENTERS AND COMMITTEE MEMBERS
ALSO, PLEASE NOTE THAT ALL VOTES, COMMENTS, AND QUESTIONS TODAY WILL BE TAKEN BY ROLL CALL METHOD
TO BE EQUITABLE
WE WILL ASK ALL COMMITTEE MEMBERS TO SPEAK IN TURN AND WAIT TO BE RECOGNIZED BEFORE SPEAKING AS MUCH AS POSSIBLE
TO MAKE THIS MEETING MORE ACCESSIBLE TO THE PUBLIC THIS MEETING IS BEING LIVE-STREAMED AND DIGITALLY RECORDED AND MAY BE VIEWED OR HEARD AT ANY TIME ON THE PORT'S WEBSITE
CLERK, CAN YOU PLEASE UNMUTE OUR PRESENTERS? COMMITTEE MEMBERS WILL REMAIN MUTED UNTIL THE PRESENTATION IS COMPLET.E AT THAT TIME I WILL CALL ON EACH OF YOU TO ASK QUESTIONS OR COMMENT IN ALPHABETICAL ORDER
WITH THAT, I BELIEVE I TURN IT OVER TO GLENN
COMMISSIONERS, THE FIRST ORDER OF BUSINESS ARE THE RESULTS OF OUR 2019 AUDIT BY MOSS ADAMS AND PRESENTING WILL BE [INAUDIBLE]
LAUREN, IF YOU COULD UNMUTE THEM
AND IF YOU HAVE THEIR PRESENTATION DECK, YOU CAN BRING THAT UP
THAT'D BE WONDERFUL
THANK YOU
I'LL GO BACK ON MUTE
I HAVE JUST SENT THE PROMPT TO BOTH ANNA AND OLGA AND LET ME KNOW IF I NEED TO SEND THIS AGAIN, AND I'M PULLING UP THE PRESENTATION NOW
THANK YOU
THANK YOU
GOOD AFTERNOON
CAN YOU HEAR ME? YES, EXCELLENT
ALRIGHT, THANK YOU VERY MUCH EVERYONE FOR YOUR ATTENTION TODAY
WE WANTED TO PROVIDE OUR AUDIT EXIT RESULTS AS WE ALWAYS DO AS WE COMPLETE THE AUDIT
THE AUDIT WAS VERY INTERESTING THIS YEAR BECAUSE OF THE DIFFERENT ENVIRONMENT AND DIFFERENT CIRCUMSTANCES THAT WE HAD TO WORK UNDER TO GET THE AUDIT COMPLETED BUT I'M PLEASED TO REPORT THAT THE AUDIT WENT VERY WELL
NOT TO SAY THAT WE DIDN'T HIT A FEW BUMPS ALONG THE ROAD, BUT WE COMPLETED IT WITH THE SAME TIMELINE AS WE HAD PLANNED WITH THE HELP OF PORT OF SEATTLE STAFF
IT WAS A GREAT SUCCESS CONSIDERING THE CIRCUMSTANCES
IF WE CAN MOVE TO THE NEXT SLIDE
A FEW THINGS ON OUR AGENDA TO PRESENT TO YOU TODAY
WE'LL TALK ABOUT THE REPORTS THAT WE HAD ISSUED AS A RESULT OF OUR AUDIT PROCEDURES
WE'LL TALK A LITTLE BIT ABOUT WHERE WE SPEND MOST OF OUR AUDIT EFFORTS AND AUDIT TIME
THEN THERE ARE A FEW MATTERS THAT WE HAVE TO REPORT TO THE AUDIT COMMITTEES THAT ARE REQUIRED BY THE AUDITING STANDARDS
WE CONSIDER THOSE IMPORTANT FOR YOUR INFORMATION
THEN I'LL GIVE A LITTLE BIT OF AN UPDATE OF WHAT'S ON THE HORIZON AS FAR AS NEW ACCOUNTING PRONOUNCEMENTS AND SOME OF THE THINGS THAT WE WILL BE WORKING TOWARDS IN THE NEXT COUPLE OF YEARS THAT WILL IMPACT FINANCIAL STATEMENTS
SO TO GET US STARTED IF WE MOVE TO THE NEXT SLIDE YOU'LL SEE A LIST OF ALL OF THE REPORTS THAT WE ISSUED
THIS IS ONE OF TWO SLIDES THAT LIST OUR REPORTS
GOOD NEWS RIGHT OFF THE BAT WE ISSUED AN UNMODIFIED OPINION ON THE FINANCIAL STATEMENTS OF THE ENTERPRISE FUND AND THE FIDUCIARY FUND
ONE THING I WOULD LIKE TO HIGHLIGHT HERE IS THAT IN A PAST THE FIDUCIARY FUND INCLUDED JUST THE WAREHOUSE AND PENSION TRUST FUND AND THIS YEAR THAT SCOPE OF THE FIDUCIARY FUND WAS EXPANDED TO INCLUDE THREE FOUR ONE EIGHT PLANS AND THAT IS A RESULT OF THE NEW STANDARDS THAT THE PORT IMPLEMENTED THIS PAST YEAR AND I WILL TALK ABOUT IT A LITTLE BIT MORE AS WE GO THROUGH THE REPORT
IN ADDITION, WE ISSUED THE SINGLE AUDIT REPORTS
THESE ARE REQUIRED BY GOVERNMENT AUDITING STANDARDS
FIRST REPORT IS ON INTERNAL CONTROLS AND COMPLIANCE OVER FINANCIAL REPORTING AND THEN THE SECOND REPORT IS THE COMPLIANCE RELATED TO MAJOR FEDERAL PROGRAMS THAT WE HAVE SELECTED
THOSE REPORTS REQUIRE US TO ACTUALLY INCLUDE IN THE REPORT ANY FINDINGS THAT WE MAY HAVE IDENTIFIED DURING AN AUDIT AND ONCE AGAIN GOOD NEWS
HERE THERE WERE NO FINDINGS THAT WE IDENTIFIED DURING THE AUDIT THAT NEEDED TO BE INCLUDED IN THOSE REPORTS
SO CLEAN UNMODIFIED OPINIONS ON THE SINGLE AUDIT
IF WE MOVE TO THE NEXT SLIDE, THERE ARE A FEW MORE REPORTS THAT WERE A RESULT OF OUR AUDIT
THE FIRST ONE OF COURSE IS A REQUIRED AUDIT REPORT ON SCHEDULED PASSENGER FACILITY, CHARGE RECEIPTS, AND EXPENDITURES, AS WELL AS RELATED INTERNAL CONTROLS SURROUNDING THAT PROGRAM
THAT IS A STAND-ALONE REPORT THAT WAS ISSUED
A REPORT ON SCHEDULE OF NET REVENUES AVAILABLE FOR REVENUE BOND DEBT SERVICE AND THAT IS A REPORT REQUIRED THAT GOES TO THE BOND HOLDERS AND THEN THERE'S TWO AGREED UPON PROCEDURE REPORTS THAT ARE REQUIRED BY REGULATORY AGENCIES
IN THIS CASE, IT'S THE WASHINGTON STATE DEPARTMENT OF ECOLOGY AND EPA
THESE RELATE TO COVERAGE FOR ENVIRONMENTAL LIABILITIES
SO QUITE A FEW REPORTS
AS I MENTIONED, ALL OF OUR REPORTS WERE ISSUED TIMELY AS WE HAD DONE IN THE PAST ON THE SAME TIMELINE
THEY WERE DATED WITH APRIL 30TH
2020
THEY'RE ALL COMPLETED, ISSUED, FINALIZED, AND DELIVERED
SO THE AUDIT IS ENTIRELY COMPLETE AT THIS POINT
I'M GOING TO PASS IT OVER TO ANNA TO TALK A LITTLE BIT ABOUT SOME OF THE AREAS OF AUDIT CAMPUSES THAT WE WANTED TO SHARE WITH YOU
ANNA
AWESOME
SO LET ME KNOW IF YOU CAN'T HEAR ME
OVER THE NEXT FEW SLIDES WE'VE LISTED SOME OF THE KEY AREAS OF AUDIT EMPHASIS INCORPORATED IN OUR AUDIT TESTING PLAN THIS YEAR
IN THE INTEREST OF TIME I'LL JUST HIGHLIGHT A FEW OF THE MOST SIGNIFICANT AREAS
SO THE FIRST AREA OF EMPHASIS IS THE INTERNAL CONTROL ENVIRONMENT
WE'RE REQUIRED UNDER AUDITING STANDARDS TO OBTAIN AN UNDERSTANDING OF THE PORT OF SEATTLE'S CONTROL ENVIRONMENT FOR PURPOSES OF RISK ASSESSMENT
OUR WORK INCLUDED ASSESSING THE DESIGN AND IMPLEMENTATION AND IN SOME CIRCUMSTANCES ALSO THE OPERATING EFFECTIVENESS OF CONTROLS AND CERTAIN KEY BUSINESS PROCESS CYCLES
THESE ARE THINGS SUCH AS CAPITAL ASSETS, AND PROJECT MANAGEMENT, CASH RECEIPTS, CASH DISBURSEMENTS, PAYROLL, AND ADMINISTRATION OF FEDERAL AWARDS
ANOTHER AREA OF EMPHASIS IS MANAGEMENT ESTIMATES
DUE TO THE SIGNIFICANT JUDGMENTS REQUIRED IN MANAGEMENT ESTIMATES AND RESERVES SUCH AS LEGAL CLAIMS, ENVIRONMENTAL REMEDIATION LIABILITIES, THE ALLOWANCE FOR DOUBTFUL ACCOUNTS, AND DEPRECIATION, THESE CONTINUE TO BE AREAS OF AUDIT EMPHASIS FOR US
CONSISTENT WITH PRIOR YEARS, CAPITAL ASSETS WAS ALSO A SIGNIFICANT PART OF OUR TESTING DUE TO ITS MATERIAL BALANCE
OUR TESTING PLAN INCLUDED SELECTING A SAMPLE OF CAPITAL PROJECTS TO TEST SIGNIFICANT INPUTS INCLUDING DIRECT EXPENSES AND OVERHEAD TO ASSESS FOR PROPER ACCOUNTING TREATMENT AND CLASSIFICATION
OUR PROCEDURES ALSO INCLUDE MEETING WITH THE PROJECT MANAGERS OF OUR SELECTED PROJECTS TO BETTER UNDERSTAND THE STATUS OF THE PROJECT AND KEY 2019 EVENTS
AND IF WE CAN MOVE TO THE NEXT SLIDE, SLIDE 6
EXCELLENT
SO REVENUE RECOGNITION REMAINS AN AREA OF AUDIT EMPHASIS FOR US
THERE IS NO SIGNIFICANT CHANGES TO OUR TESTING APPROACH WHICH INCLUDED REVIEW OF THE 2019 [INAUDIBLE] REVENUE REQUIREMENT AS WELL AS CONFIRMING BALANCES WITH A SAMPLE OF AIRLINES DIRECTLY
THERE'S ALSO A SIGNIFICANT AMOUNT OF BOND ACTIVITY DURING 2019
OUR PROCEDURES INCLUDED TESTING 457 MILLION DOLLARS OF INTERMEDIATE LEAN REVENUE BONDS AND SUPPORTING KEY DEBT ACTIVITY OUTLINED IN THE NET REVENUE SCHEDULE THROUGH CONFIRMATION WITH BANKING INSTITUTIONS
AND IF WE CAN MOVE TO THE NEXT SLIDE, PLEASE
SO AS OLGA MENTIONED AT THE BEGINNING OF THE PRESENTATION AS PART OF THE PORT ADOPTING GASBE 84, WE ARE REQUIRED TO SCOPE IN THE THREE IDENTIFIED 401K PLANS WHICH MEET THE CRITERIA AS FIDUCIARY ACTIVITIES FOR AUDITING PROCEDURES
WE AUDITED BOTH THE 2018 AND 2019 ACTIVITY WHICH INCLUDED CONFIRMING THE ASSETS HELD BY THE PLANS DIRECTLY WITH A THIRD PARTY RECORD KEEPER AS WELL AS TESTING A SELECTION OF PLAN CONTRIBUTIONS AND PARTICIPANT DISTRIBUTIONS FOR BOTH YEARS UNDER AUDIT
OUR TEAM ALSO PERFORMED INFORMATION TECHNOLOGY CONTROL TESTING WHICH INCLUDED REVIEW OF THE MAJOR PEOPLESOFT UPGRADE WHICH WAS COMPLETED AT THE BEGINNING OF 2019
AND FINALLY, WE ALSO PERFORMED A SINGLE AUDIT OF THE PORT OF SEATTLE'S FEDERAL AWARDS AND IDENTIFIED ONE MAJOR FEDERAL AWARD PROGRAM, WHICH WAS TESTED IN THE CURRENT YEAR
THIS WAS THE FAA AIRPORT IMPROVEMENT PROGRAM, WHICH HAD TOTAL EXPENDITURES OF 5.4 MILLION DOLLARS
NOW I'LL GIVE THE PRESENTATION BACK TO OLGA TO WALK THROUGH SOME OF OUR REQUIRED AUDIT COMMUNICATIONS
THANK YOU, ANNA
ALL RIGHT
SO AS I MENTIONED THERE'S A FEW REQUIRED COMMUNICATIONS THAT THE AUDITING STANDARDS REQUIRE US TO COMMUNICATE TO THOSE CHARGED WITH GOVERNANCE, WHICH IS MANAGEMENT AND THE AUDIT COMMITTEE AS WELL AS THE BOARD OF COMMISSIONERS
SO WE JUST WANTED TO GO THROUGH THOSE
THE FIRST ONE IS WE PERFORM THE AUDIT OF THE FINANCIAL STATEMENTS THAT ARE REALLY THE RESPONSIBILITY OF MANAGEMENT OF THE PORT OF SEATTLE
WE PERFORMED THAT AUDIT TO ISSUE AN OPINION AND WE PERFORM THAT AUDIT TO ISSUE AN INDEPENDENT OPINION
AS SUCH, MANAGEMENT TAKES FULL RESPONSIBILITY FOR THE FINANCIAL STATEMENTS, THEIR PREPARATION, AS WELL AS ALL OF THE ACCOUNTING SUPPORT THAT WE AUDIT DURING OUR PROCESS
AND I SAY THAT EVERY TIME BUT I DO WANT TO STRESS IT AGAIN THAT MANAGEMENT TAKES THEIR RESPONSIBILITIES VERY VERY SERIOUSLY
WE HAVE MANY CONVERSATIONS THROUGHOUT THE AUDIT ABOUT FINANCIAL STATEMENT TRANSACTIONS, DISCLOSURES, AND OTHER MATTERS THAT PERTAIN TO THE FINANCIAL STATEMENTS AND EVERY TIME I FEEL THAT EVERYONE WE TALKED TO WITH MANAGEMENT TAKES THE RESPONSIBILITY VERY VERY SERIOUSLY, ALWAYS WANTS TO MAKE SURE THE FINANCIAL STATEMENTS ARE VERY GOOD AND UNDERSTANDABLE FOR THE READERS OF FINANCIAL STATEMENTS, AND HOW THE CORRECT INFORMATION AND PRESENTATION IN ACCORDANCE WITH GAP
SO I THINK THAT THEY HOLD THE FINANCIAL STATEMENTS TO A VERY HIGH STANDARD AND I WANTED TO MAKE SURE I MENTION THAT
WITH THAT WE PERFORM A THOROUGH PLANNING PROCESS DURING THE BEGINNING OF THE AUDIT WHICH OF COURSE WE DO IN THE FALL BEFORE THE YEAR-END IS OVER AND AS PART OF THAT PROCESS WE'RE HOPING THAT NOTHING EXCITING OR UNUSUAL OR UNEXPECTED COMES OUT DURING AN AUDIT WHEN WE COME BACK TO PERFORM THE ACTUAL AUDIT FIELD WORK IN MARCH OF THE FOLLOWING YEAR
AND I'M PLEASED TO SAY THAT THERE WERE NO SURPRISES OF ANY KIND
WE HAD HELD THOSE PLANNING CONVERSATIONS, QUITE A FEW OF THEM WAS MANAGEMENT AND VARIOUS GROUPS AND CARRIED OUT OUR AUDIT PROCEDURES WITHOUT ANY DELAYS AND ANY SURPRISES
SIGNIFICANT ACCOUNTING POLICIES ARE DESCRIBED IN FOOTNOTE ONE OF THE FINANCIAL STATEMENTS
THOSE FOR THE MOST PART STAY CONSISTENT FROM YEAR TO YEAR
BUT EVERY YEAR WE LOOK AT THOSE, IF THERE'S NEW POLICIES THAT ARE BEING IMPLEMENTED THAT THEY'RE IN ACCORDANCE WITH GAAP AND THIS LATEST GAP B STANDARDS THAT ARE ISSUED
WE ARE ALSO REQUIRED TO REPORT TO YOU IF WE IDENTIFIED ANY AUDIT ADJUSTMENTS DURING THE AUDIT THAT WERE POSTED BY MANAGEMENT TO CORRECT THE FINANCIAL STATEMENTS OR IF THERE WERE IN THE PAST AND HELD TO BE CORRECTED IN FUTURE PERIODS
THERE WAS ONE AUDIT ADJUSTMENT
ACTUALLY, A PROPOSED AUDIT ADJUSTMENT THAT WAS DISCOVERED IN AUDIT AND DID NOT GET CORRECTED
IT WILL BE CORRECTED OR WAS CORRECTED IN JANUARY 2020
BUT ONE THING ABOUT THIS PARTICULAR ADJUSTMENT, IT'S A RECLASSIFICATION OF A COMPLETED PROJECT FROM CONSTRUCTION AND PROGRESS TO CAPITAL ASSETS IN THE AMOUNT OF TWELVE POINT FOUR MILLION DOLLARS
THIS PARTICULAR ADJUSTMENT OR ISSUE WAS BROUGHT TO OUR ATTENTION BY MANAGEMENT THEMSELVES DOING THEIR OWN INTERNAL ANALYSIS OF COMPLETED PROJECTS AT YEAR END
IT WASN'T SOMETHING THAT CAME UP IN OUR SELECTIONS PROCESS WHEN WE'RE TESTING THE CAPITAL PROJECT
SO THIS IS MANAGEMENT WAS DOING A VERY RIGOROUS PROCESS OF LOOKING THROUGH THE PROJECTS THAT WERE COMPLETED AND MAYBE NOT CLOSED QUITE AS TIMELY AND THIS IS ONE OF THOSE PROJECTS THAT THEY HIGHLIGHTED AND BROUGHT TO OUR ATTENTION
SO WE AGREED THAT FROM THE STANDPOINT POINT OF FINANCIAL STATEMENTS, IT WAS IMMATERIAL TO REFLECT THAT RECLASSIFICATION IN FINANCIAL STATEMENTS AND MANAGEMENT WANTED TO PERFORM A MORE THOROUGH PROCESS OF ALL UNCOMPLETED AND NOT CLOSED PROJECTS
SO THAT ENTRY WASN'T REFLECTED IN 2019 FINANCIAL STATEMENTS
BUT AS I SAID, MANAGEMENT IS WORKING ON DOING A DEEPER UNDERSTANDING INTO THEIR PROCESSES AND MAKING THAT CORRECTION IN 2020
AS I SAID JUST ONE PROPOSED JOURNAL ENTRY THAT DID NOT GET REFLECTED IN A 2019 FINANCIAL STATEMENT
ONCE AGAIN SELF IDENTIFIED BY PORT MANAGEMENT
AND IF WE CAN GO TO THE NEXT SLIDE
AS I MENTIONED EARLIER, THERE WERE QUITE A FEW NEW ACCOUNTING PRONOUNCEMENTS THAT WERE NEEDING TO BE IMPLEMENTED IN 2019
THERE ARE THREE OF THEM THAT WERE IMPLEMENTED GASB 83 ON CERTAIN ASSET RETIREMENT OBLIGATIONS, GASB 84 FIDUCIARY ACTIVITIES AND GASB 88 ON CERTAIN DEBT RELATED DISCLOSURES
OF THOSE THREE THE ONE THAT HAD THE MOST IMPACT IS GASB 84 AND FIDUCIARY ACTIVITIES
WE ACTUALLY HAD TO EXPAND THE SCOPE TO INCLUDE THOSE THREE 401K PLANS THAT [INAUDIBLE] CRITERIA FOR BEING REPORTED AS FIDUCIARY ACTIVITIES AND WE HAD TO PERFORM AN AUDIT FOR BOTH 2019 AND 2018 TO ENSURE PROPER COMPARATIVE PRESENTATION IN A FINANCIAL STATEMENT
SO IT WAS QUITE A BIT OF A INCREASE IN SCOPE AND THE TIMELINE THAT WE HAD TO PERFORM THOSE ADDITIONAL PROCEDURES
BUT THAT IS NOW REFLECTED IN THE FINANCIAL STATEMENTS IN ACCORDANCE WAS GASB REQUIREMENTS
AS PART OF THE PROCESS OF IMPLEMENTING THE NEW GASB REQUIREMENTS OR JUST PERFORMING THE AUDIT, WE DIDN'T HAVE ANY DISAGREEMENTS WITH MANAGEMENT
LIKE I SAID AUDIT WENT INTERESTINGLY AS WE STARTED SOME FIELD WORK AT THE OFFICES AT THE PORT AND THEN HAD TO GET OUT OF THE FIELD AND PERFORM A LOT OF THE WRAP-UP AND SOME OF THE AUDIT PROCEDURES REMOTELY
BUT IT WORKED VERY WELL
WE COLLABORATED VERY WELL WITH ALL OF THE PORT STAFF, ALL OF THE INDIVIDUALS THAT WE NEEDED TO COMMUNICATE WITH WERE AVAILABLE FOR OUR QUESTIONS
SO I CONSIDER THAT ACTUALLY AUDIT GOING QUITE SMOOTHLY
AS FAR AS WE KNOW, MANAGEMENT DID NOT CONSULT WITH ANY OTHER AUDITORS ON ANY OF THE MATTERS
DURING OUR PROCEDURES WE ALWAYS TRY TO BRING AN ELEMENT OF SURPRISE INTO THE AUDIT TO MAKE SURE THAT WE ADDRESS A RISK OF FRAUD OR ILLEGAL ACTS
WE DIDN'T NOTICE ANYTHING DURING THE AUDIT THAT NEEDED TO BE REPORTED TO YOU AT THIS TIME
WE ALWAYS PERFORM CERTAIN PROCEDURES TO MAKE SURE WE UNDERSTAND THAT THERE IS NO FINANCIAL STRAINS OR ANYTHING LIKE THAT THAT WILL PRECLUDE PORT FROM BEING ABLE TO PERFORM AND OPERATE FOR THE FOLLOWING YEAR
THIS YEAR OF COURSE MANY INTERESTING CONVERSATIONS WERE HELD ABOUT THE EFFECT OF THE PANDEMIC ON PORT OPERATIONS AND 2020
A LOT OF THAT INFORMATION IS INCLUDED IN MANAGEMENT DISCUSSION AND ANALYSIS TO THE FINANCIAL STATEMENTS AS WELL AS SOME DISCLOSURES IN THE FOOTNOTES TO THE FINANCIAL STATEMENTS
SO THAT'S ADDITIONAL INFORMATION YOU WILL SEE THAT IS DIFFERENT FROM PREVIOUS STATEMENTS
AND IF WE GO TO THE NEXT SLIDE
I HAVE LISTED JUST A FEW UPCOMING ACCOUNTING PRONOUNCEMENTS THAT WILL BE EFFECTIVE IN THE NEXT COUPLE OF YEARS
LUCKILY FOR ALL OF US, WE CELEBRATE IT AS MUCH AS OUR CLIENTS TO DO, IS GASB CAME OUT IN MAY WITH DEFERRAL DATES FOR SOME OF THESE NEW STATEMENTS THAT WOULD HAVE BEEN EFFECTIVE IN 2020
THEY GOT DEFERRED BY ABOUT ONE YEAR AND IN CASE OF LEASES STATEMENT, GOT DEFERRED BY 18 MONTHS
SO SOME OF THESE INSTEAD OF BEING IMPLEMENTED IN 2020 GOT PUSHED OUT TO 21 AND 22
NOT TO SAY THAT WORK ON ASSESSING THE IMPACT OF THOSE NEW STANDARDS IS NOT OCCURRING RIGHT NOW PARTICULARLY WITH GASB 87
PORT STAFF IS WORKING DILIGENTLY ON MAKING SURE THAT THEY GET ALL OF THE FRAMEWORK NEEDED IN PLACE TO GET TO IMPLEMENT THAT STANDARD IN 2022
GASB 89 PORT ACTUALLY IMPLEMENTED THAT STANDARD EARLY EFFECTIVE JANUARY 1 2020 AND THAT PARTICULAR STANDARD GOES AWAY WITH CAPITALIZING INTEREST ON DEBT RELATED TO CONSTRUCTION PROJECT
IN THE PAST THAT INTEREST WAS CAPITALIZED AS PART OF PROJECT COSTS
GOING FORWARD, IT WILL BE EXPENSED AS OTHER INTEREST EXPENSE INCURRED ON DEBT
SO THAT HAS BEEN IMPLEMENTED AND GASB 91 WILL BE EVALUATED ONCE AGAIN FOR 2021 REPORTING
SO LOTS OF NEW AND EXCITING STANDARDS TO LOOK FORWARD TO IN THE NEXT COUPLE OF YEARS AND WE'LL BE UPDATING YOU ON THOSE IN A FUTURE PRESENTATION
NEXT SLIDE
ALL RIGHT, SOME OF THE OTHER COMMUNICATIONS JUST AS I SAID EARLIER, EVEN THOUGH THE WAY THE AUDIT WAS PERFORMED WITH DIFFERENT
WE TRIED TO KEEP THE CONSISTENCY OF COMMUNICATING IN THE REGULAR WEEKLY STATUS MEETINGS WAS THE PORT MANAGEMENT TEAM TO MAKE SURE THAT WE'RE ALL ON THE SAME PAGE AS FAR AS WHAT NEEDS TO BE DONE TO MEET THE DEBT TIMELINE
SO THOSE MEETINGS WERE HELD REGULARLY, ALTHOUGH NOT IN PERSON
THANK YOU FOR VIDEO CONFERENCING
AS I MENTIONED WITH THE NEW GASB STANDARDS THAT WERE EFFECTIVE FOR 2019 REPORTING, MANAGEMENT PREPARED WHITE PAPERS FOR A REVIEW AND ANALYSIS
THOSE WERE PREPARED ACTUALLY EARLIER IN 2019
SO WE STARTED EVALUATING THE IMPACT OF THOSE STATEMENTS IN A SEPTEMBER AND OCTOBER TIME FRAME TO MAKE SURE THAT WE HAD GOOD INFORMATION TO IMPLEMENT THOSE AT YEAR END
AND JUST WANTED TO SAY ONCE AGAIN
JUST THANK YOU TO THE PORT TEAM FOR BEING FLEXIBLE AND AVAILABLE AND JUST HANDLING THE AUDIT TIMELINE AND PROCESS IN GOOD ORDER TO MAKE SURE THAT WE MEET THE TIMELINE
I THINK COLLABORATIVELY IT WORKED OUT VERY WELL
ONE LAST BULLET POINT ON HERE I WANTED TO HIGHLIGHT IS THAT TO BE IN COMPLIANCE OR TO BE RESPONSIVE TO THE PORT'S COMMITMENT TO SMALL BUSINESSES, IN THE PAST WE HAD PARTNERED WITH ONE FIRM TO BE PART OF OUR AUDIT TEAM AND IT WAS BRETT RICHARDS FOR A NUMBER OF YEARS
THEY WERE PART OF OUR TEAM IN HELPING US PERFORM THE AUDIT
HOWEVER, THEY ARE A SMALL FIRM SO WE COULD ONLY GET ONE OF THEIR STAFF TO BE PART OF OUR AUDIT TEAM AND THEY'RE INVOLVED IN THE AUDIT WAS A SMALL PERCENTAGE OF THE OVERALL AUDIT EFFORT
IT WAS UNDER 10% SO TO CONTINUE WITH THAT COMMITMENT TO THE PORT IN MAKING SURE THAT SMALL BUSINESSES GET EXPOSURE AND GET INVOLVED IN CONTRACTS WITH THE PORT, WE PARTNERED WITH ANOTHER FIRM THIS YEAR
THIS WAS OUR FIRST YEAR PARTNERING WITH MARIS COTTON POLY AMINO ASSOCIATES, AND WE BROUGHT ANOTHER PERSON AS PART OF OUR TEAM TO PERFORM THE AUDIT
IT WORKED OUT QUITE WELL, AND WE'RE HOPING THAT PARTNERSHIP WILL CONTINUE
BUT WITH THOSE TWO FIRMS OUR AUDIT INVOLVEMENT OF THE SMALL FIRMS AS PART OF OUR AUDIT FEE APPROXIMATELY THIRTEEN PERCENT THIS YEAR WERE PAID OUT TO SMALL BUSINESSES
SO I JUST WANTED TO HIGHLIGHT THAT WE WANTED TO HELP WITH THAT COMMITMENT OF THE PORT TO GET SMALL BUSINESSES INVOLVED IN A BIGGER PROJECT SUCH AS THE AUDIT
WITH THAT WE CAN GO TO THE LAST SLIDE
ONCE AGAIN, A BIG THANK YOU TO THE PORT TEAM, TO THE PORT MANAGEMENT, TO EVERYONE THAT WE TALKED TO THROUGHOUT THE AUDIT
YOU KNOW, WE ALWAYS HAVE EXECUTIVE MEETINGS WITH THE PORT MANAGEMENT DURING OUR AUDIT WHERE WE MEET WAS EXECUTIVES AND TALK ABOUT WHAT HAPPENED DURING THE YEAR
THIS YEAR ALL OF THAT HAD TO HAPPEN OVER THE PHONE AND EVERYBODY WAS AVAILABLE, EVEN THOUGH THERE WERE OTHER PRIORITIES IN FEBRUARY AND MARCH THIS YEAR
SO WE WANTED TO MAKE SURE THAT WE RECOGNIZE THE EFFORT THAT HAD TO GO INTO THAT AND WE APPRECIATE ALL OF THE TIME THAT WAS PUT IN ASSISTING US WITH THE AUDIT
AND WITH THAT I WILL BE HAPPY TO TAKE ANY QUESTIONS
THANK YOU, OLGA AND ANNA FOR THAT GREAT PRESENTATION
GLEN, I'M NOT SURE IF YOU HAVE ANY QUESTIONS YOU HAVE QUEUED UP BUT CERTAINLY IN THE PRE-BRIEFING I WAS MADE AWARE OF THE THE JOURNAL ENTRY AND THE ISSUES AROUND IT AND ASKED WHETHER SOMETHING LIKE THAT COULD BE ANY SIGN OF MALICIOUS INTENT AND I WAS REASSURED THAT AN INSTANCE LIKE THAT IS MORE ABOUT GETTING OUR PROCESSES IN ORDER AND I KNOW THAT THE TEAM IS WORKING HARD ON THAT BOTH THE FINANCIAL TEAM AND THE AVIATION TEAM MAKING SURE THAT THAT ISN'T AN ISSUE IN COMING YEARS
SO I VERY MUCH APPRECIATE THE CLARITY ON THAT
I'M GOING TO ASK OUR CLERK TO UNMUTE COMMISSIONER BOWMAN TO ASK IF SHE HAS ANY QUESTIONS
GREAT
THANK YOU
I DON'T HAVE ANY QUESTIONS
I JUST WANT TO SAY I'M THRILLED TO HEAR THAT THERE'S A GOOD CLEAN AUDIT AND I WANTED TO COMPLIMENT OUR PRESENTERS
YOU'RE CLEARLY IN THE RIGHT JOB IF YOU'RE EXCITED ABOUT THE NEW GASB REGULATIONS COMING FORWARD
SO THAT MAKES ME FEEL GOOD
AND THEN I WOULD ALSO
I'M SORRY
I'M GETTING A BAD ECHO
CAN YOU HEAR ME OKAY? YES, GREAT
SORRY
IT'S JUST MUST BE ON MY END
THEN
I APOLOGIZE
NO OTHER QUESTIONS
I'M JUST GLAD TO SEE THE CLEAN AUDIT
THANK YOU
AND CHRIS
DO YOU HAVE ANY QUESTIONS? I HAVE NO QUESTIONS
GOOD JOB AND ESPECIALLY THE CIRCUMSTANCES THIS YEAR GETTING IT DONE AND I'M GLAD TO SEE ANOTHER CLEAN OPINION
THANK YOU ALL
I'M NOT SURE IF YOU GUYS ARE GOING TO STICK AROUND
THIS IS YOUR BAILIWICK
SO IF YOU WANT TO STICK AROUND FOR THE REST OF THE AUDIT COMMITTEE, WE'D LOVE TO HAVE YOU BUT ALSO, I APPRECIATE YOUR PRESENTATION TODAY AND THANKS FOR ALL THE WORK THIS YEAR
THANK YOU
THANK YOU VERY MUCH
AND GLENN WITH THAT I THINK I TURN IT BACK TO YOU
COMMISSION
IF I COULD JUST MAKE ONE COMMENT
I DO WANT TO SAY THAT LANCE AND TEAM ON THE ADJUSTMENT ARE TAKEN VERY SERIOUSLY AND THEY ARE MAKING SURE THAT PROCESSES ARE PUT IN PLACE SO WE DON'T SEE IT AGAIN
SO THANKS TO JEFF BROWN AND LANCE
WITH THAT, LAUREN IF YOU COULD BRING UP THE MAIN DECK AND MOVE FORWARD
YEP DOING SO NOW
YOU SHOULD SEE IT MOMENTARILY
EXCELLENT
COMMISSIONERS
TODAY, WE'RE GOING TO TALK ABOUT A COUPLE ITEMS ESSENTIALLY THE AUDIT PLAN, CHANGES TO THE PLAN
PRIMARILY BECAUSE CERTAIN VENDORS AND CERTAIN INDIVIDUALS THAT WE CAN'T GET A HOLD OF BECAUSE OF THE COVID IMPACT
SO WE'LL BE DEFERRING SOME AUDITS
OR, REQUESTING PERMISSION TO DEFER SOME AUDITS INTO NEXT YEAR AND THEN WE'LL ALSO BRING A FEW AUDITS FORWARD THAT ARE MORE REALISTIC
AND THEN WE'LL ALSO HAVE LITTLE CAPACITY IN THE PLAN, BUT WE CAN TALK ABOUT THAT ALSO AS WE MOVE FORWARD
SO WITH THAT LAUREN IF WE COULD MOVE TO THE NEXT SLIDE
THERE ARE A FEW PRINCIPLES WE LOOKED AT WHEN WE MADE THE ADJUSTMENTS TO THE PLAN
FIRST AND FOREMOST WE WANT TO LOOK AT COVID IMPACTS TO THE BUSINESS AND TO OUR RESOURCES
WITH EVERYONE WORKING REMOTELY
IT'S HARDER TO GET A HOLD OF PEOPLE AND THE IMPACT THAT [INAUDIBLE] BUSINESSES PRIMARILY CONCESSIONAIRES
THE BIGGEST CHANGES TO THIS PLAN YOU'LL SEE ARE CONCESSIONAIRES THAT EITHER AREN'T AVAILABLE OR THEY'RE TEMPORARILY SHUT DOWN SO THAT UNABLE TO GET US THE DATA
SO FOR THOSE YOU'LL SEE THAT WE'VE ASKED TO MOVE THOSE FORWARD
WE ALSO LOOKED AT PORT BUSINESS WHERE AN AUDIT AT THIS POINT WOULD PUT TOO MUCH OF A BURDEN IN PORT BUSINESS OR CERTAIN UNITS WITHIN THE PORT AND WANTED TO ASKED FOR THAT TO BE MOVED
ONE OF THE THINGS WE'RE FOCUSING ON IS: WITH OUR TIME TIME HOW CAN WE PROVIDE RESOURCES TO THE PORT RIGHT NOW? WHAT CAN WE DO? OUR VALUE-ADD? AND AN EXAMPLE OF THAT WOULD BE THE FEMA WORK THAT WE DID EARLIER IN THE YEAR, WHICH WAS PRESENTED
WE TALKED ABOUT AT THE LAST AUDIT COMMITTEE MEETING
ADDITIONALLY, WE'RE PARTNERING WITH THE AVIATION TEAM ON ADDRESSING SOME OF THE PROCESS IMPROVEMENT OPPORTUNITIES FOR THE ADJUSTMENT THAT MOSS ADAMS NOTED
HOW CAN WE FIX THOSE? OUR TEAMS ARE ACTIVELY PROVIDING GUIDANCE
AND AS WE DO THIS WE'RE VERY CAREFUL IF OUR STANDARDS
WE'RE ALLOWED TO RECOMMEND AND ADVISE BOTH GOVERNMENT STANDARDS AND THE INTERNATIONAL STANDARDS
WE CAN'T OWN ANYTHING
WE CAN'T IMPLEMENT
WE CAN JUST PROVIDE GUIDANCE AND WE'RE TRYING TO USE THAT MORE AND THROUGH THE SECOND HALF OF THE YEAR
BESIDES COMPLETING AUDITS, WE'RE AVAILABLE AND WE'LL TRY TO PROVIDE MORE GUIDANCE TO JUST STEVE METRUCK, THE BUSINESS TEAMS, WHERE WE CAN ADD VALUE JUST CONTINUING DOWN THAT PATH
SO LAUREN IF WE CAN MOVE TO THE NEXT SLIDE
COMMISSIONERS ON THE LEFT HAND SIDE OF OUR AUDIT PLAN, PROPOSED MODIFICATIONS, MOST OF THE CONCESSIONAIRES SURPRISINGLY HAD GIVEN US THE DATA EARLIER IN THE YEAR WHEN WE WERE IN THE PROCESS OF GATHERING THE DATA
SO WE WERE ABLE TO GET DATA FOR MOST OF THE CONCESSIONAIRES
THERE WERE TWO CONCESSIONS, INTERNATIONAL AND LENLEN ,WHICH HAVEN'T BEEN ABLE TO GET US ANY INFORMATION AND WE THOUGHT WOULD BE MORE APPROPRIATE TO JUST DEFFER TO THE NEXT YEAR
ON THE OPERATIONAL SIDE WE FELT THAT OUTSIDE SERVICES WOULD PUT TOO MUCH FORBODING AND CTO AT THIS TIME
SO WE'LL BE REQUESTING TO MOVE THAT TO 2021
AND THEN IN LIEU OF THAT, DELEGATION OF COMPLIANCE AUTHORITY, WHICH IS AN AUDIT THAT WOULD PUT THE ONUS MORE IN THE ORGANIZATION AS WE SPREAD IT OUT AS OPPOSED TO FOCUSING SPECIFICALLY ON CPO
IT WOULD OBVIOUSLY INVOLVE CPO BUT TO A LESSER EXTENT AND OUR TARGET GOAL ON THAT IS TO SPREAD IT OUT AND DUE BEFORE BY DECEMBER
SO PERHAPS IN THE DECEMBER AUDIT COMMITTEE MEETING WILL HAVE THE DELEGATION OF AUTHORITY COMPLIANCE DONE
AND I WANT TO ALSO POINT OUT THAT WE PRESENTED THIS AS A CONTINGENCY AUDIT AND THE DECEMBER 2019
AUDIT COMMITTEE IS SOMETHING THAT COULD BE DONE
ON THE CAPITAL FRONT, IN ABOUT MARCH WE BACKED OFF ON THE CAPITAL AUDITS AND STARTED MOVING TO ASSIST THE BUSINESS IN OTHER WAYS AS I MENTIONED
SO AS WE START OUT WE DON'T WANT TO PUT TOO MUCH OF THE ONUS ON THE BUSINESS
SO THE NORTH TERMINAL UTILITIES UPGRADE, WE'RE REQUESTING TO MOVE THAT TO EARLY NEXT YEAR AND WE'LL STILL BE ABLE TO GET THE OTHER THREE OUT
IT'S DONE, WERE COMPLETED
WE'VE COMPLETED SERVICE TUNNEL
WE'RE JUST GETTING STARTED ON THE AOA PERIMETER FENCE
AND IN THE FOURTH QUARTER, WE SHOULD GET CENTRAL LOCAL INFRASTRUCTURE UPGRADES DONE
SO WE ARE ABLE TO MAKE SOME PROGRESS AND WE'LL GET MOST PLAN DONE
WE'LL JUST BE DEFFERING ONE
ON THE IT SIDE, INFORMATION TECHNOLOGY SIDE, THE PARKING GARAGE SYSTEM IS GOING TO BE REPLACED IN THE MIDDLE OF THIS YEAR, BUT DUE TO COVID THAT'S BEEN PUSHED OUT TO NEXT YEAR
SO CLEARLY THERE'S NOTHING TO AUDIT THERE UNTIL IT IS IMPLEMENTED, THE NEW SYSTEM IS IMPLEMENTED
THIS IS A REQUEST OF OUR AIRPORT DIRECTOR LANCE
SINCE IT'S GOTTEN PUSHED OUT WE'LL BE OBVIOUSLY LOOKING AT IT AGAIN NEXT YEAR WHEN THAT IMPLEMENTATION IS COMPLETED
AND FINALLY BECAUSE WE'RE MOVING THAT OUT, WE DO HAVE A CONTINGENCY AUDIT THAT WE COULD MOVE UP AND NOW WE'RE DEFENSES
NOW, ESPECIALLY WITH COVID AND ALL THE REMOTE WORK, IT CONTROLS BECOME EVEN MORE IMPORTANT AND GASB 90 CONTROLS CAN COST THE BOARD DEARLY AS IT HAS SOME BUSINESSES
SO MAKING SURE THAT OUR IT CONTROLS ARE IMPORTANT AND FUNCTIONING
JUST HAVING ANOTHER SET OF EYES IS VERY VALUE-ADDED
SO I'LL BE REQUESTING TO MOVE THAT ON
LAUREN IF YOU CAN MOVE TO THE NEXT SLIDE
SO THIS SLIDE PROVIDES A OVERALL FRAMEWORK ON OUR AUDIT PLAN
AT THIS POINT OF THE YEAR, I'D EXPECT TO GET A LITTLE BIT MORE DONE THAN WHAT'S IN THE GREEN BUT WE HAVE MADE SOME PROGRESS AND WE HAVE GOTTEN QUITE A FEW AUDITS DONE
IN THE SECOND HALF OF THE YEAR FROM THE SEPTEMBER AUDIT COMMITTEE MEETING AS WE PICK UP THE PACE A LITTLE BIT WE WILL HAVE QUITE A BIG AGENDA
ALL THE AUDITS THAT YELLOW WILL BE DONE
SO THERE'S QUITE A FEW THERE AND THEN IN DECEMBER WE'LL WRAP THE YEAR UP BY COMPLETING THE AUDITS IN THE ORANGE-ISH TYPE OF COLOR
THE AUDITS IN RED ARE THE ONES THAT WE'RE ASKING TO DEFER TO 2021
AND WITH THAT I'LL PAUSE
I'LL PASS IT BACK TO YOU COMMISSIONER CALKINS
AND IF THERE ARE ANY QUESTIONS, I'LL ADDRESS THOSE NOW
OTHERWISE, I WILL ASK FOR APPROVAL OF THIS PLAN
THANK YOU GLENN
AND YEAH, OBVIOUSLY THE DEFERRALS
FOR COMMISSIONER BOWMAN AND CHRIS, WE'RE GOING TO TAKE A VOTE HERE IN A SEC ON THIS PROPOSED UPDATED AUDIT PLAN
AND SO THIS IS A GOOD OPPORTUNITY FOR ASKING ANY QUESTIONS AROUND WHAT'S BEING DEFERRED, WHAT'S BEING ADDED
I HAD A GOOD CONVERSATION WITH GLENN BEFORE THIS
AND IT ALL SEEMS PRETTY COMMON-SENSE TO ME
SO WITH THAT I WANT TO GIVE COMMISSIONER BOWMAN AN OPPORTUNITY
GREAT
I ALSO HAD A GOOD MEETING WITH GLENN PRIOR TO THIS ONE
AND SO I DON'T HAVE ANY QUESTIONS AND I THOUGHT THAT THE REVISED PLAN MADE A LOT OF SENSE
OBVIOUSLY, I THINK ONE THINK THE STAFF DID A GOOD JOB OF IS PICKING WHAT WE WEREN'T ABLE TO DO THIS YEAR
SO I'M FINE WITH PROCEEDING FORWARD
AND CHRIS? YEAH, I THOUGHT IT WAS A REALLY GOOD APPROACH FOR HOW TO RESPOND TO THE CURRENT ENVIRONMENT AND ADJUST THE PLAN
I THINK IT MAKES SENSE
AND IT'S A GOOD APPROACH
ALL RIGHT
SO SINCE COMMISSIONER BOWMAN AND I NEED A VOTE ON THIS
CAN I GET A MOTION TO APPROVE THE PROPOSED UPDATED WORK PLAN? SO MOVED
AND SECONDED
BARRING ANY OTHER DISCUSSION OF THE TOPIC ALL THOSE IN FAVOR
SAY AYE? AYE
AYE
I THINK THAT'S UNANIMOUS
[LAUGHTER] ALL RIGHT
THANK YOU GLENN
THANKS FOR THE UPDATED WORK PLAN
VERY GOOD/ LAUREN IF YOU COULD GO BACK TO THE PRESENTATION AND GO TO SLIDE 5 PLEASE
YES
GOING THERE NOW
SO COMMISSIONERS AND MS GOEKE, ONE OF THE THINGS I WANTED TO DO IS ALSO CAPTURE ALL THE AUDITS WE'VE DEFFERED AND JUST COME UP WITH A RUNNING LIST OF POTENTIAL AUDITS THAT WE CAN DO IN 2021
SO CLEARLY, THE ITEMS IN RED ARE THE ONES THAT WE WON'T GET DONE THIS YEAR THAT WE'LL DEFFER TO NEXT YEAR AND THEN CREATING A RUNNING LIST, WHICH I'LL CONTINUE TO ADD TO THROUGHOUT THE COURSE OF THE YEAR
PRIMARILY THE ITEMS IN PURPLE, THE RENT AND CONCESSION DEFERRAL RECOVERY
SO WE HAVE DEFERRED A LOT OF RENT FOR THE CONCESSIONAIRES AT THE AIRPORT AND IT IS A RELATIVELY MANUAL PROCESS
SO NEXT YEAR WHEN IT COMES TIME AND THE DUST HAS SETTLED, INTERNAL AUDIT WOULD LIKE TO COME BACK AND LOOK AT THE THESE AND MAKE SURE THAT WE ARE RECUPPING AND WE ARE DOING THE RIGHT THINGS IN TRACKING AND MONITORING THE DEFERRALS
THERE'S A LOT OF MONEY ON THE TABLE IN BOTH WAYS
WE WANT TO MAKE SURE WE'RE FAIR AND WE WANT TO MAKE SURE WE'RE ACCURATE
SO THAT'S SOMETHING THAT I HIGHLIGHTED AND ANOTHER ITEM THAT I'VE HIGHLIGHTED IS CAPITALIZATION OF ASSETS
AS I MENTIONED THE PORT AND THE TEAMS THROUGH THE PORT ARE WORKING VERY HARD TO IMPROVE PROCESSES TO ADDRESS THE ITEM THAT OLGA IDENTIFIED AND TALKED ABOUT FROM MOSS ADAMS IN THEIR AUDIT
SO AFTER CONTROLS WERE PUT IN PLACE, WE'LL DO A DOUBLE CHECK OF THOSE IN NEXT YEAR QUITE LIKELY AND MAKE SURE THAT THOSE CONTROLS ARE OPERATING EFFECTIVELY
SO WE DON'T HAVE THAT ISSUE AGAIN
ANOTHER THING THAT ISN'T ON HERE THAT I'VE CAPTURED ALSO IN DISCUSSIONS WITH COMMISSIONER BOWMAN
THERE WAS THE BIDS FOR THE BAGGAGE SYSTEM PHASE TWO CAME IN SIGNIFICANTLY MORE THAN THE INTERNAL ESTIMATES
SO THAT'S SOMETHING THAT I'VE TALLIED UP AND ADDED TO THE PLAN
THAT'S SOMETHING POTENTIALLY WE CAN LOOK AT NEXT YEAR TO UNDERSTAND WHY AND PROVIDE BACK TO THE AUDIT COMMITTEE WHY THESE THINGS HAPPEN AND ARE THERE ANY RISKS OUT THERE? SO COMMISSIONERS, AT THIS POINT BEFORE I MOVE ON TO FOLLOW UP, OUR NEXT ITEM, I'LL TAKE PAUSE AND SEE IF THERE ARE ANY QUESTIONS OR ADDITIONS OR OTHER SUGGESTIONS AT THIS POINT
I WOULD JUST SAY I THINK FOR EVERY ONE OF US IN A POSITION OF OVERSIGHT OF GOVERNMENT AGENCIES LIKE THOSE ON THIS COMMITTEE, THE NEWS ABOUT THE SIGNIFICANT FRAUD THAT OCCURRED AT THE EMPLOYMENT SECURITY DEPARTMENT OF THE STATE GOVERNMENT PROBABLY SENDS SHUTTERS THROUGH EVERYONE
THE SCALE OF IT WAS ENORMOUS
IT WAS CLEARLY IN PART A RESULT OF A DESIRE TO GET MONEY INTO THE HANDS OF THOSE WHO NEEDED IT AS QUICKLY AS POSSIBLE AND RELINQUISHING SOME CONTROLS THAT WOULD OTHERWISE HAVE BEEN IN PLACE AND SO GLENN, YOU KNOW, I KNOW THAT IT IS A BALANCING ACT IN A MOMENT LIKE THIS WHEN THE PORT IS SEEKING TO PLAY A ROLE IN THE ECONOMIC RECOVERY WHILE AT THE SAME TIME BEING A GOOD STEWARD OF THE RESOURCES THAT HAVE BEEN PROVIDED TO US BOTH THROUGH TAXPAYER ASSETS AND ALSO FROM YOU KNOW, OUR BUSINESS LINES
AND SO WE'RE GOING TO ASK THE THE AUDIT TEAM TO DOUBLE DOWN ON WORKLOAD IN A LOT OF WAYS THIS YEAR BOTH IN THE WAYS THAT YOU'VE STEPPED UP TO PERFORM NEW FUNCTIONS IN LIGHT OF COVID AND THEN ALSO TO ENSURE THAT OVER THE NEXT MONTHS AND YEARS AS WE GO THROUGH A PROCESS OF ECONOMIC RECOVERY THAT WE ARE BEING GOOD STEWARDS OF THOSE ASSETS THROUGHOUT
AND I WILL TURN IT NOW TO COMMISSIONER BOWMAN
I DON'T HAVE ANY QUESTIONS
THAT WAS REALLY WELL SAID COMMISSIONER CALKINS
THANK YOU
I THINK IT'S IMPORTANT FOR THE PUBLIC TO UNDERSTAND THE PREVIEW OF SOME OF THE EXTRAORDINARY MEASURES THAT THE PORT IS LOOKING TO TAKE THIS YEAR
AND AS YOU SAID APPROPRIATELY IT IS VERY MUCH A BALANCING ACT
BUT WE'RE GOING TO NEED THE AUDIT TEAM'S GUIDANCE TO MAKE SURE THAT WE STAY WITHIN THE RULES
AND CHRIS? I HAVE NO QUESTIONS
THANKS
THANK YOU
ALL RIGHT, GLENN
PROCEED
COMMISSIONER CALKINS , YOUR SPOT ON
WE REALLY DO NEED TO DOUBLE DOWN ESPECIALLY IN THIS NEW ENVIRONMENT WHERE EVERYTHING IS REMOTE
AND BECAUSE EVERYTHING IS REMOTE, CONTROLS HAVE CHANGED TO SUCH A LARGE EXTENT THAT DOUBLING DOWN, KEEPING US EXTRA SET OF EYES ON THINGS, IT DOESN'T GUARANTEE IT BUT IT MITIGATES SOME RISK AND WE'LL ABSOLUTELY SEE WHAT WE CAN THERE
LAUREN NEXT SLIDE, PLEASE
COMMISSIONERS AND MS GERKE, ONE OF THE THINGS THAT WAS ASKED BY MS GERKE IN THE LAST AUDIT COMMITTEE MEETING WAS A PRESENTATION OF OPEN ISSUES
NOT ONLY FROM TARGET DATE BUT BY REPORT DATA AS WELL
SO WE DID GO BACK AND LOOK AT ALL FOUR AUDIT ISSUES FROM 2017 ON THAT HAVE BEEN REPORTED IN AUDIT REPORTS AND TRIED TO IDENTIFY WHICH ITEMS ARE LAGGING FROM THE TIME WE ISSUED THE AUDIT REPORT AND THEN WHICH ITEMS ARE LATE
OR EVEN NOT DUE
JUST TRY TO CAPTURE ALL OF THE OPEN ISSUES
NOW, THIS IS VERY IMPORTANT BECAUSE ONE OF THE THINGS WE DO IS WE IDENTIFY RISK AND IF THOSE RISKS ARE JUST TAKEN AND PUT ON A SHELF AND NOT ADDRESSED IT BECOMES A PROBLEM FOR THE BUSINESS
SO ON THE 36 ISSUES OUTSTANDING FROM REPORT DATE, YOU'LL SEE WE'VE GOT ABOUT EIGHT THAT ARE 0 TO 6 MONTHS OVERDUE
AND A LOT OF THOSE, MOST OF THOSE WE CAN'T DO DUE TO COVID
WITH THE QUICK CHANGE, WE EXPECTED THOSE TO BE DONE VERY QUICKLY, BUT BECAUSE OF COVID, IT SLIPPED A LITTLE BIT
THEY'RE NOT A BIG RISK AT THIS POINT
SOME ITEMS ARE ON THE 6 TO 12 MONTH RANGE
QUITE A FEW OF THOSE
AND A LOT OF THOSE ARE SECURITY SENSITIVE SO I CAN'T TALK ABOUT THOSE NOW, BUT THEY ARE AVAILABLE IF YOU'D LIKE DETAIL ON THAT AND IN OUR EXECUTIVE SESSION OR SECURITY SENSITIVE SESSION, NON-PUBLIC SESSION IN SEPTEMBER, I WILL PROVIDE MORE DETAILS ON THOSE ONCE THEY ARE OPENED
A FEW OF THEM ARE ONE TO TWO YEARS OLD AND SOME ARE MORE THAN TWO YEARS
NOW, ALL OF THESE ARE BEING ACTIVELY WORKED
THEY HAVEN'T BEEN NEGLECTED
IT'S JUST THAT SOME OF THEM TAKE LONGER OR THE SCOPE OF THINGS ARE LONGER
FOR INSTANCE THE ITEMS THAT ARE MORE THAN TWO YEARS OLD, ONE ITEM IS SECURITY SENSITIVE AND JUST REQUIRES LOTS MORE WORK THAN PLANNED AND THE OTHER ITEM IS JUST BECAUSE IT REQUIRES A NEW SYSTEM TO BE IMPLEMENTED AT ON THE MARITIME SIDE
AND THEY WERE VERY CLOSE TO IMPLEMENTING ONE, BUT THEY FOUND IT WASN'T PCI COMPLIANT SO THEY HAD TO TAKE A STEP BACK
IT WAS IN THE PLAN TO GET DONE, BUT WE ARE STILL TRACKING IT
AS FAR AS ISSUES THAT ARE OUTSTANDING FROM TARGET DATE, THERE ARE ONE OR TWO ITEMS THAT ARE A LITTLE OLD
BUT AGAIN, THEY'RE BEING ACTIVELY WORKED
THE MAJORITY OF THEM ARE RELATIVELY NEW AND MANY OF THEM ARE NOT DUE YET
SO WE ARE ACTIVELY TRACKING THEM
IN THE APPENDIX YOU'LL FIND ALL THE ISSUES LISTED OUT
AND THE SECURITY SENSITIVE ONES ARE MARKED AS SECURITY SENSITIVE, BUT WE STILL HIGHLIGHT THEM AS BEING DUE
AND I WANT TO EMPHASIZE THAT WE HAVE BUSINESS ACTIVELY WORKING THESE IT'S JUST THAT SOME HAVE SLIPPED AND WE ARE HIGHLIGHTING THOSE SO THAT YOU GET ADDRESSED AND DON'T POSE A RISK TO THE BUSINESS
SO THAT IS ALL I HAD ON FOLLOW-UP
WE DID HAVE ONE AUDIT QDOBA, WHICH I'M NOT GOING TO TALK ABOUT BECAUSE THERE WERE NO ISSUES, IT WAS A CLEAN AUDIT SO WITH THAT LAUREN IF YOU CAN OPEN UP THE MICS AND COMMISSIONER CALKINS, IT'S ALL YOURS IF YOU'D LIKE TO MAKE ANY COMMENTS OR ASK ANY QUESTIONS ON FOLLOW-UP OR ANY OTHER AUDIT COMMITTEE MEMBER
YEAH
I THINK I'LL GO AROUND ONE MORE TIME
SO COMMISSIONER BOWMAN, ANY QUESTIONS? NO, I DON'T HAVE ANY QUESTIONS
I JUST APPRECIATE THE FACT THAT MS GERKE BROUGHT THIS QUESTION BEFORE US IN THE LAST MEETING AND GLENN THANK YOU FOR YOUR FOLLOW-UP
I DON'T HAVE ANY CONCERNS ABOUT THOSE THAT ARE CARRYOVERS
AND CHRIS GERKE? NO, I JUST WANT TO THANK THEM FOR THIS REPORT BECAUSE I THINK IT'S IMPORTANT FOR THE COMMITTEE JUST TO KIND OF SEE HOW THINGS ARE AGING
I THINK IT'S ONE THING TO LOOK AT IF THEY'RE PAST DUE OR NOT
BUT I WANT TO MAKE SURE WE HAD VISIBILITY ON THINGS THAT DIDN'T HAVE DUE DATES AND JUST TO MAKE SURE THERE'S NOT A BIG GROUP OF THEM THAT'S OUTSTANDING FOR A LONG PERIOD OF TIME BECAUSE THE IMPACT THAT MIGHT HAVE ON THE CONTROL ENVIRONMENT IN GENERAL
YEAH, IT'S ODDLY COMFORTING FOR ME TO SEE THESE REPORTS I THINK BECAUSE OF MY HISTORY AS A SMALL BUSINESS OWNER WHERE MY ARNP AGING REPORTS FOR SUCH A PART OF MY DAILY CONSUMPTION THAT HAVING THESE AGAIN IS LIKE A WELCOME HOME, BUT THAT SAID IF THERE ARE NO FURTHER COMMENTS OR QUESTIONS ABOUT THIS AGENDA ITEM I DO THINK WE'RE ALL OPEN RIGHT NOW
SO IF THERE'S ANY OTHER GENERAL COMMENTS OR OTHER BUSINESS THAT COMMITTEE MEMBERS WOULD LIKE TO SHARE, NOW IS THE TIME
I JUST HAD ONE QUESTION FOR GLENN, I THINK
PLEASE GO AHEAD
AND IT JUST MIGHT BE A GENERAL QUESTION
HOW IS YOUR TEAM DOING IN THE CURRENT ENVIRONMENT? I KNOW THEY'RE WORKING DIFFERENTLY
IS THERE ANY CONCERN ABOUT THEM? BASED ON THE WAY YOUR REVISING PLANS I FEEL LIKE THEY'RE STILL VERY BUSY DOING A LOT OF THINGS BUT I JUST WANT TO MAKE SURE THEM AND YOU ARE DOING OKAY
THANK YOU MS GERKE
ACTUALLY IT'S A VERY GOOD QUESTION
I THINK EVERYONE IS FUNCTIONING FINE WORKING REMOTELY
ON SOME OF THE THINGS THAT WE NORMALLY GO DO SITE VISITS ON OR PHYSICALLY OBSERVE SOMETHING THERE ARE SITUATIONS WHERE WE CAN'T DO THAT
WE HAVE TO RELY ON PEOPLE'S WORD OR JUST WHATEVER ALTERNATIVE METHODS
SO SOME THINGS ARE MORE CHALLENGING BUT WE ARE MAKING PROGRESS AND GETTING DATA
SURPRISINGLY WE'RE GETTING MORE INFORMATION AND DATA RIGHT NOW THAN WE EXPECTED AND WE ARE MAKING MORE PROGRESS THAN WE EXPECTED
THE BUSINESS IS SLOWLY STARTING TO PICK UP ESPECIALLY ON THE PORT SIDE SO WE ARE ABLE TO ENGAGE WITH PEOPLE, TEAMS AND SKYPE HAS BEEN INVALUABLE IN OUR INTERACTION WITH INDIVIDUALS AND OUR ABILITY TO PARTNER
SO IN THE COMING QUARTER, WE SEE OURSELVES GETTING OUT A LITTLE BIT MORE WITH MASKS ON WHERE POSSIBLE AND OBSERVING A FEW MORE THINGS AND IMPROVING SLOWLY
BUT FOR RIGHT NOW WE ARE WE ARE FUNCTIONING AND WILL CONTINUE TO DO SO
WE'LL PICK UP STEAM THERE
I ALSO WANTED TO LET THE COMMITTEE KNOW THAT I SAW SPENCER ONE OF YOUR STAFF, SPENCER BRIGHT, PRESENT TO THE IAEA ABOUT CONSTRUCTION AUDITING LAST MONTH
SO IT WAS GOOD TO SEE HIM OUT AND PRESENTING VIRTUALLY AND I WANTED TO JUST CALL ATTENTION TO THAT
IS SPENCER ON THE LINE
YEAH
HE IS
WELL DONE SPENCER
I LIKE TO HEAR HOW WE'RE HELPING OTHER AGENCIES
NOT ONLY SPENCER BUT NICKYTA GOYAO WHO WORKS WITH SPENCER FOR SPENCER
THEY JOINTLY CO-PRESENTED TO [INAUDIBLE] SEATTLE COMMUNITY AND THE NORTHWEST COMMUNITY BECAUSE IT WAS THE NORTHWEST CHAPTER ON CAPITAL AUDITING
THEY DID MAKE A PRESENTATION THERE
SO CONGRATULATIONS TO BOTH NICKYTA TO SPENCER
AND THEN ONE OF THE OTHER THINGS SPENCER ALSO DID WITH ON THE NATIONAL ASSOCIATION OF CONSTRUCTION AUDITORS
HE WAS ON A NATIONAL PANEL TO TALK ABOUT CONSTRUCTION AUDITING
THAT'S GREAT
YEAH, BOTH COMMISSIONER BOWMAN AND I WERE IN THE OFFICE YESTERDAY FOR A REQUIRED IN PERSON MEETING OF THE COMMISSION AND I WAS REMINDED OF A NUMBER OF THINGS
ONE, ALL OF THE SIGNIFICANT STEPS THAT THE PORT OPERATION STAFF HAS MADE TO ENSURE THAT WE CAN ADHERE TO SOCIAL DISTANCING THERE'S EVEN A TEMPERATURE SCREENING COMING IN
THERE'S LOTS OF OPPORTUNITIES TO SANITIZE AND WASH HANDS, BUT IT'S INTERESTING
WE'RE LUCKY IN SOME WAYS AND THAT WE ARE A PREDOMINANTLY A HORIZONTAL BUILDING
WE'RE ONLY THREE STORIES
AND SO ONE OF THE CHOKE POINTS THAT THEY TELL US IN LARGER BUILDINGS IS THE ELEVATORS WHERE PEOPLE ARE STARTING TO RUN MODELING ON HOW LONG IT'LL TAKE TO GET EVERYONE IN AND OUT OF A SKYSCRAPER DOWNTOWN IF EVERYBODY'S COMING AND GOING AND IT'S LITERALLY LIKE HOURS AND HOURS TO GET EVERYBODY IF YOU HAVE TO RUN THE ELEVATORS AS SINGLE-OCCUPANCY VEHICLES, SO
A REALLY INTERESTING TIME AS WE TRY TO SAFELY RETURN TO WORK AS POSSIBLE
WELL WITH THAT SAID I WANT TO THANK EVERYBODY INVOLVED FOR PUTTING TOGETHER PRESENTATIONS TODAY AND PARTICULARLY TO YOU GLENN FOR ORGANIZING ALL OF THIS
AND HEARING NO FURTHER COMMENTS
WE WILL NOW ADJOURN
THANK YOU ALL SO MUCH
TIME IS 1:54.

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