The Audit meeting scheduled for 2021-04-08 at Remote

Transcript

The Audit meeting scheduled for 2021-04-08 at Remote

ALL RIGHT GOOD AFTERNOON EVERYBODY THIS IS COMMISSIONER BOWMAN CALLING TO ORDER THE PORT OF SEATTLE AUDIT COMMITTEE SPECIAL MEETING TODAY IS THURSDAY APRIL EIGHT TH 2021 AND THE TIME IS 2:33 WE'RE MEETING REMOTELY TODAY THE TEAM'S PLATFORM YOU COMPLY EXCUSE ME WITH THE GOVERNOR'S SAFE START STAY HEALTHY ORDER AND IN ACCORDANCE WITH PROCLAMATION 20-28
PRESENT WITH ME TODAY IS COMMISSIONER MEMBER SAM CHO AND PUBLIC MEMBER CHRIS GIRKY WILL THE CLERK PLEASE CALL THE ROLL TO ENSURE ALL COMMITTEE MEMBERS ARE ON THE LINE
THANK YOU BEGINNING WITH COMMISSIONER CHO
AYE
THANK YOU
MEMBER GIRKY
PRESENT
THANK YOU
AND COMMISSIONER BOWMAN
I'M HERE
ALL RIGHT THANK YOU VERY MUCH THIS IS A VIRTUAL MEETING WE'VE MADE SPECIAL ARRANGEMENTS TO PROVIDE FOR REMOTE PARTICIPATION FOR ALL OF OUR STAFF AND THE OUTSIDE PRESENTERS AND COMMITTEE MEMBERS
ALSO PLEASE NOTE THAT ALL VOTES COMMENTS AND QUESTIONS TODAY WILL BE TAKEN BY THE ROLL CALL METHOD AS A RESULT OF OUR VIRTUAL ENVIRONMENT
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 WEBSITE
SO OUR FIRST ORDER OF BUSINESS TODAY IS THE APPROVAL OF THE MINUTES FROM THE JANUARY 29, '21 AUDIT COMMITTEE MEETING
ARE THERE ANY CORRECTIONS TO THE MINUTES? AND IF THERE'S NOT IS THERE A MOTION IN A SECOND TO APPROVE? A MOTION FOR THE MINUTES? SO MOVE
THANK YOU
AND I BELIEVE I HAVE TO SECOND IS THAT CORRECT MICHELLE? THAT IS CORRECT COMMISSIONER
ALL RIGHT AND I SECOND COMMISSIONER CHO'S MOTION
WITH THAT COMMITTEE MEMBERS THE QUESTION ON APPROVAL OF THE MINUTES IS BEFORE US PLEASE SAY YES OR NO WHEN YOUR NAME IS CALLED
BEGINNING WITH COMMISSIONER.CHO
AYE
THANK YOU
COMMISSIONER BOWMAN
AYE
THANK YOU
YOU HAVE TWO YESSES AND ZERO NOS
ALRIGHT THE MEETING MINUTES ARE APPROVED AS PRESENTED
NEXT WE HAVE LET'S SEE OUR NEXT ORDER OF BUSINESS IS THE UPDATES AND THE FIRST UPDATE IS REGARDING THE DIRECTOR'S ANNUAL COMMUNICATION INDEPENDENCE INTERNAL AUDIT CHARTER QUALITY ASSURANCE AND FOLLOW UP
PRESENTERS PLEASE UMUTE YOURSELVES NOW
COMMITTEE MEMBERS WILL REMAIN MUTED UNTIL THE PRESENTATION IS COMPLETE OR BREAK IS TAKEN FOR QUESTIONS
AT THAT TIME I WILL CALL ON EACH OF YOU TO ASK QUESTIONS OR MAKE COMMENTS
MR FERNANDEZ PLEASE INTRODUCE THIS ITEM
THANK YOU COMMISSIONER BOWMAN
MICHELLE IF YOU COULD PULL UP THE PRESENTATION
JUST GIVE ME JUST A MOMENT HERE I'M HAVING TECHNICAL DIFFICULTIES TODAY SO HOPEFULLY IT WILL ALL JUST COOPERATE NICELY
THERE WE GO
WORKING BEAUTIFULLY
NEXT SLIDE PLEASE MICHELLE
OKAY
COMMISSIONERS AND MS GORKY ONCE THE THINGS WE'RE REQUIRED TO DO IS ON A PERIODIC BASIS COMMUNICATE WITH YOU ON FOUR ELEMENTS THAT I'VE GOT HIGHLIGHTED HERE AND FOR YOUR BENEFIT WE FOLLOW TWO STANDARDS
INSTITUTE OF INTERNAL AUDITORS, OR THE IIA STANDARDS AND THE GOVERNMENT ACCOUNTABILITY OFFICE THE GAO STANDARDS AND THEY BOTH GOVERN INTERNAL AUDITS AND BECAUSE WE FOLLOW THOSE STANDARDS THEY HAVE THEIR UNIQUE REQUIREMENTS THAT REQUIRE US TO BE A BEST PRACTICE SHOP AND TO FALL UNDER THEIR UMBRELLA THERE ARE CERTAIN THINGS THAT WE NEED TO DO
SO THESE ARE THE THINGS THAT I'M GOING TO BRIEFLY TALK ABOUT TODAY
NEXT SLIDE PLEASE MICHELLE
THE FIRST ITEM IS INDEPENDENCE AS WITH ANY ORDER BE THE EXTERNAL OR INTERNAL INDEPENDENT BECOMES A VERY IMPORTANT THING FROM AN INTERNAL PERSPECTIVE THE MOST IMPORTANT THING IS ARE YOUR REPORTS COMPROMISED IF YOU DON'T REPORT TO THE RIGHT PEOPLE THEN SOMEONE IN THE ORGANIZATION COULD HAVE THE ABILITY TO MODIFY WHAT YOU'RE DOING AND COMMUNICATION ISN'T BASICALLY CLEAR AND OBJECTIVE
SO I WANT TO CONFIRM THAT INTERNAL OUR DEPARTMENT REPORTS THE AUTO COMMITTEE AND WE'RE MEETING TODAY AND ADMINISTRATIVELY WE REPORT TO THE EXECUTIVE DIRECTOR
SO NOTHING'S CHANGED THERE AND THAT CONTINUES
NEXT SLIDE PLEASE
COMMISSIONER'S, ONE OF THE THINGS WE NEED TO DO ON A PERIODIC BASIS IS HAVE A QUALITY ASSURANCE REVIEW SO IN ORDER TO HAVE QUALITY IN OUR REPORTS AND OUR WORK PAPERS AND OUR DOCUMENTATION, BOTH STANDARDS REQUIRE AN EXTERNAL PARTY TO COME IN FROM TIME TO TIME AND REVIEW THE WORK THAT WE'RE DOING
WE LAST HAD THIS IN DECEMBER OF 2018 AND THEY GO THROUGH ALL OUR WORK PAPERS THEY LOOK AT HOW WE DOCUMENT
THEY WANT TO MAKE SURE THAT PEOPLE ARE APPROVING STAFF WORK IN A TIMELY MANNER
AND AND THE QUALITY OF OUR WORK
ALSO THEY REVIEW ALL OF THAT WE LIKE I SAID WE HAD IN DECEMBER 2018 WHERE WE GOT THE HIGHEST RATING, OR A VERY CLEAN AUDIT
ESSENTIALLY AUDIT THE AUDITORS
BUT WE HAVE PERFECT RATING WE'LL HAVE THE NEXT ONE MOST LIKELY 2022
WE HAVE AN EXTENSION BECAUSE IT COVID WHERE WE CAN DO IT ANYTIME GOSH IN TERMS OF THREE YEAR REQUIREMENT FOR THE GEO THEORETICALLY WE COULD DO IT WE WOULD NORMALLY HAVE IT STARTED AT THE END OF THIS YEAR
WE'VE GOT A YEAR AND A HALF EXTENSION BUT WE'LL STILL GET IT DONE IN 2022
ANOTHER THING WE DO IS IN HOUSE WE HAVE A STAFF MEMBER THAT GO THROUGH TRAINING AND SELF ASSESSMENTS SO SHE WILL LOOK AT ALL THE WORK PAPERS PERIODICALLY OR A SAMPLE OF THEM AND MAKE SURE THAT WE'RE COMPLIANT
WHEN WE DO HAVE THE EXTERNAL REVIEW COME IN YOU KNOW THAT REVIEW WE KIND OF BUFFER TO MAKE SURE THAT EVERYTHING'S FIXED AND CLEANED UP AND IT ALSO CATCHES OTHER THINGS THAT THEY MIGHT NOT COVER IN THEIR SAMPLE
SO MULTIPLE POINTS LOOKING AT WHAT WE DO TO ASSURE THAT THE WORK THAT WE DO OUR I'S ARE DOTTED AND T'S ARE CROSSED AND AND WE BEAT ALL THE REQUIRED STANDARDS
BOTH FOR THE INTERNATIONAL STANDARDS AND THE US GEO STANDARDS
NEXT SLIDE PLEASE MICHELLE
THERE WAS A SLIDE A BULLET POINT THAT I TALKED ABOUT EARLIER CALLED THE CHARTER
EARLIER WE DID OUR CHARTER REVIEW
I JUST WANT TO POINT OUT WE DID OUR CHARTER REVIEW LAST YEAR SO WE DON'T NEED TO DO IT THIS YEAR AND OUR CHARTER IS CURRENTLY UPDATED
NOW ISSUE FOLLOW UP THIS IS THE LAST THING THAT THEY MAKE US LOOK AT
AND THE REASON THIS IS IMPORTANT IS WHEN YOU DO AN AUDIT AND YOU HAVE RECOMMENDATIONS, YOU WANT TO MAKE SURE THAT THOSE ARE ADDRESSED
YOU DON'T DO THE AUDIT AND IT'S JUST PUT ON A SHELF AND NOBODY DOES ANYTHING WITH IT BECAUSE OTHERWISE IT'S A WASTE OF EVERYONE'S TIME
WHERE YOU DO SOMETHING AND NOTHING IS DONE
IN SOME CASES OBVIOUSLY IT WOULD BE DONE BUT BUT BY FOLLOWING UP MONITORING AND MAKING SURE THAT ISSUES AND VULNERABILITIES GET CLOSED OUT, IT ASSURES A STRONGER CONTROL ENVIRONMENT
SO THESE CHARTS OVER HERE TALK A LITTLE BIT ABOUT HOW LATE SOME OF THESE ISSUES ARE
THE FIRST CHART ON THE LEFT TIME OUTSTANDING FROM THE PORT DATE SHOWS THAT WE'VE GOT SOME ISSUES
A FEW THAT ARE MORE THAN TWO YEARS
SOME THAT ARE ONE TO 2 YEARS AND SO ON
THE CHART OF THE RIGHTS OF THE 39 ISSUES OF TARGET DATE YOU KNOW THAT MEANS THEY'RE OVERDUE
AUDITEE SAYS THEY'RE GOING TO GET SOMETHING DONE THE PARTICULAR DATE WE TRACK AND IF THEIR WAY OVERDUE WE'LL SHOW THEM THIS CHART
WILL ALSO HIGHLIGHT THEM AND ASSESS WHETHER THERE ARE REASONS FOR BEING LATER REASONABLE
AS THE EIGHT ISSUES ARE OUTSTANDING FOR MORE THAN TWO YEARS
1 WAS BECAUSE OF A MARINE,IT'S A BILLING SYSTEM FOR THE MARINE FISHING AND COMMERCIAL OPERATION THE MARITIME SID, AND YOU KNOW THEY WERE PRETTY FAR ALONG AND IT DIDN'T SEEM TO BE WORKING OUT WITH THE VENDOR SO WE'RE BUILDING IT IN HOUSE
COMMISSIONS ALREADY APPROVED THAT
WE'RE A LITTLE BIT BEHIND SCHEDULE BUT THEY ARE ON TRACK AND THEY ARE WORKING ON IT
SO THAT'S WHAT WE WANT TO SEE THAT JUST NOT TOTALLY NEGLECTED
ON THE IT FRONT THERE ARE SEVERAL ISSUES AS YOU CAN SEE THAT ARE OVERDUE
PRIMARILY BECAUSE IT'S FOCUS HAS BEEN MORE ON COVID AND THE REMOTE WORK ENVIRONMENT, BUT I DON'T WANT US TO LOSE SIGHT THESE ARE STILL IMPORTANT AND WE WILL CONTINUE TO FOLLOW UP WITH THEM
AND THEY DO NEED TO ADDRESS THEM AT SOME POINT
SO JUST A DIRECTIONAL HIGHLIGHT
AND BEFORE I MOVE TO THE NEXT LINE OF THE AUDIT PLAN I'LL OPEN IT UP AND SEE IF ANYONE GOT ANY QUESTIONS
AT THIS POINT
GREAT, ANY QUESTIONS? LET'S START WITH COMMISSIONER CHO
NO
NOT THIS TIME THANKS
OKAY MEMBER GIRKY, ANY QUESTIONS? NO QUESTIONS FOR ME THANK YOU
GLENN I JUST HAVE ONE QUESTION AND I APOLOGIZE IF I'M NOT SEEING THIS WHAT ARE THE TOTAL NUMBER OF ISSUES THAT YOU'RE FOLLOWING WHAT'S THE UNIVERSE? FROM REPORT DATE DATE RIGHT NOW, YOU KNOW, THE OUTSTANDING ISSUES THAT WE'RE FOLLOWING UP ON ARE 39 THE TOP LEFT
RIGHT, NO I UNDERSTAND THAT I MEAN OF ALL OF THE ISSUES OVER THE SAME TIME PERIOD WHAT'S THE PERCENT WAS 39 PERCENTAGE OF WHAT? OH UP THE ENTIRE UNIVERSE SO WHEN AN ISSUE IS COMPLETED AND CLOSED, SO WE PROBABLY HAVE HUNDREDS OF ISSUES THAT WE'VE SEEN AND WE'VE DOCUMENTED, BUT MOST OF THEM HAVE BEEN FIXED
SO FROM THE HUNDREDS OF ISSUES THAT WE'VE HIGHLIGHTED OVER THE YEARS, MANY HAVE BEEN CLOSED OUT
THE 39 THAT ARE ON ARE OUTSTANDING FROM THAT DATE
NOW SINCE WE DON'T TRACK ONES THAT ARE CLOSED AND ADDRESS WE JUST CLOSE THEM OUT
AND I MEAN WE COULD GET TO THAT GET THAT DATA BUT I DON'T KNOW HOW MUCH VALUE ADD
NO THAT'S OKAY I WAS JUST CURIOUS IF YOU KNEW OFF THE TOP OF YOUR HEAD
AND I REALLY APPRECIATE THIS BECAUSE IT'S VERY HELPFUL TO SEE I THINK FOR THE PUBLIC AS WELL YOUR FIRST POINT WAS VERY WELL TAKEN OF YOU'RE DOING THESE AUDITS AND REALLY MAKING SURE THAT THE WORK HAS BEEN DONE IS JUST AS CRITICAL AS DOING THE AUDIT ITSELF
AND SO THANK YOU FOR PROVIDING VISIBILITY TO THIS FOLLOW UP
IT'S REALLY IMPORTANT
IS THE THERE ANY SORT OF YOU MENTIONED THE IT ISSUE WITH COVID
ANY OTHER SORT OF SYSTEMIC ISSUES THAT YOU'RE SEEING THAT WOULD CAUSE A LONGER OUTSTANDING TIME
I THINK AT THIS POINT NO
I THINK IT'S IT THAT'S SLIPPING THAT WE PROBABLY NEED TO VISIT IN THE NON PUBLIC SESSION
OKAY BECAUSE THEY'RE SECURITY SENSITIVE
THAT WOULD BE WHERE THERE ARE A LARGER GROUPING OF ISSUES AT THIS POINT THAT ARE STILL OPEN
THAT WE NEED TO FIGURE OUT WE GOING TO DO THEM
SO THE STRATEGY FIGHT TEAM MIGHT BE SUCH THAT WE DECIDED TO DO SOMETHING DIFFERENT
BUT AS OF RIGHT NOW THEY HAVEN'T INDICATED TO US THAT THEY'RE DOING ANYTHING DIFFERENT THEY'RE STILL WORKING ON THEM
SO IT'S A MATTER OF MAKING SURE WE GET THE RIGHT RESOURCES TO RIGHT PEOPLE AT THE RIGHT TIME
SO AT SOME POINT THEY'RE ADDRESSED
AND SO POTENTIAL VULNERABILITIES
OKAY THANK YOU FOR THAT
ALRIGHT WELL IF THERE ARE NO FURTHER QUESTIONS AT THIS TIME FOR GLENN I THINK WE'LL MOVE ON TO THE NEXT ITEM
YES
NEXT SLIDE PLEASE MICHELLE
SO COMMISSIONERS FOR BENEFIT THE PUBLIC AND FOR COMMISSIONER CHO I JUST WANT TO GO OVER OUR AUDIT PLAN FOR 2021
WE MADE QUITE A GOOD PROGRESS ON TO DATE
BUT YOU KNOW ON THE LEFT HAND SIDE WE HAVE LIMITED CONTRACT APPLIANCE AUDITS
AND THESE ARE THE CONCESSIONAIRES AT THE AIRPORT AND ON THE MARITIME SIDE THAT PAYS PERCENTAGE REVENUES AND PERCENTAGE FEES IN ADDITION TO THE MAC
AND A LOT OF THIS INFORMATION IS SELF REPORTED, THEY SEND IN THERE WHAT WOULD THEY OWE US THE FINANCIAL STATEMENTS THAT THEY PUT TOGETHER, AND SEND US A PAYMENT, SO IT'S A QUASI HONOR SYSTEM TO SOME EXTENT
SO WE GO OUT, WE CYCLE THROUGH THEM AND WE MAKE SURE THAT A CERTAIN PERIOD OF TIME THE LARGER VENDORS ARE LOOKED AT BASED ON DOLLAR THRESHOLD, AND THE MEDIUM SIZE ABOUT FIVE TO 7 YEARS WE TRY TO GO AFTER THEM
AND AUDIT THEM AND THEN THE SMALLER VENDORS IT'S AD HOC
SO WHENEVER WE HAVE TIME OR RESOURCES BUT WE DO THE THEM OR AUDIT THEM FROM TIME TO TIME
ON THE OPERATIONAL SIDE THE BLUE COLUMN HERE, THESE ARE ALL AUDITS THAT COME THROUGH OUR RISK ASSESSMENT PROGRAM, WHERE WE GO OUT WE'LL TALK TO MANAGEMENT, TO STAFF AND TO COMMISSIONERS, AND GET THEIR CONCERNS
WE CAN'T LOOK AT EVERYTHING IN THE ORGANIZATION, BUT THE HIGHER RISK ITEMS THAT ARE BROUGHT FORWARD
AND WE'LL USE OUR JUDGMENT TOO
WE'LL LOOK AT HERE
WE HAVE THE OPERATIONAL ONES AND THE PURE OPERATIONAL ONES ACTUALLY CAPITAL IT'S A QUASI OPERATIONAL ONESELF SINCE CAPITAL IS SO LARGE AT THE PORT WE PUT THAT IN ITS OWN BUCKET
AND THEN WE'VE GOT ALL THE CAPITAL ONES OUT THERE THAT WE'LL BE LOOKING AT THIS YEAR
AND THEN WE ALSO HAVE INFORMATION TECHNOLOGY ON ITS
ON THE INFORMATION TECHNOLOGY SIDE, THE T2 AIRPORT PARKING GARAGE SYSTEM WAS A MANAGEMENT REQUEST, BASED ON A NEW SYSTEM THAT'S BEING PUT IN AND THE DOLLARS THAT FLOW THROUGH THAT
BUT MANY OF THE OTHER ONES ARE YOUR MALWARE, AND CONTINUOUS VULNERABILITY MANAGEMENT
THOSE ARE PART OF THE CIS TOP 20
CENTER FOR INTERNET SECURITY AND THOSE ARE THERE'S STANDARD BASIC AUDITS CRITICAL AUDITS THAT NEED TO BE DONE
AND THERE'S 20 OF THEM THAT EVERY ORGANIZATION SHOULD DO
WE'RE TRYING TO CYCLE THROUGH THOSE
BIOMETRICS WAS A COMMISSION REQUEST FROM THE BIOMETRICS COMMITTEE
AND THEN THE PCI PAYMENT CARD INDUSTRY AUDIT IS A REQUIREMENT THAT'S REQUIRED EVERY YEAR
AND WE HISTORICALLY WE FARMED IT OUT TO A CONSULTANT, BUT WE HAVE SOMEBODY WITHIN INTERNAL AUDIT THAT'S CERTIFIED TO DO THESE
SHE HAS GOT THE ISA CERTIFICATION WHICH IS AN INTERNAL QUALIFIED ASSESSOR CERTIFICATION, WHICH ALLOWS US TO DO IT
SO WE'LL BE DOING THIS THIS YEAR
AND THAT BASICALLY IT'S A REQUIREMENT FROM VISA AND MASTERCARD FOR ANYONE THAT TAKES VISA AND MASTERCARD AND HAS A CERTAIN VOLUME THAT FLOWS THROUGH EVERY ORGANIZATION THAT HAS LARGE VOLUMES OF THESE AND MASS CARD TRANSACTIONS HAVE TO DO PCI AUDIT EVERY YEAR, AND THAT'S WHY WE'RE DOING THIS
NEXT SLIDE PLEASE
THESE ARE JUST CONTINGENCY AUDITS COMMISSIONERS, SO AT THE BEGINNING OF THE YEAR WE'LL PUT A FEW CONTINGENCY AUDITS OUT THAT WE DON'T EXPECT TO DO UNLESS WE HAVE TIME OR RESOURCES
IT GIVES US A LITTLE PUSH IN SO WE DON'T HAVE DOWNTIME AND HAVE TO COME BACK TO THE COMMISSION
MOST OF THESE WILL TRANSFER OVER TO 2022 WE WILL GO THROUGH A FULL RISK ASSESSMENT AGAIN THIS YEAR AND ASSUMING THAT THEIR RISK STILL EXISTS AND IS HIGH ENOUGH AND THERE'S NOTHING ELSE FOR US IN THESE WILL TRANSFER OVER
OTHERWISE IF WE DO HAVE RESOURCES IN TIME WE'LL DO SOME OF THESE
BUT FROM NOW IT LOOKS LIKE ESPECIALLY ON THE OPERATIONAL SIDE, WE MOST LIKELY WON'T GET TO ANYTHING UNTIL 2022
AND THAT'S IT IN THE AUDIT PLAN
I'M GOING TO JUMP INTO THE AUDITS, cOMMISSIONERS, UNLESS ANYONE HAS QUESTIONS ON THE AUDIT PLAN
LET'S SEE
THANK YOU FOR THAT
LET'S MAKE SURE THAT WE DON'T HAVE A ROUND OF QUESTIONS
COMMISSION, UM, MICHELLE COULD YOU PLEASE CALL THE ROLL? BEGINNING WITH COMMISSIONER CHO
YEAH, I AM LOOKING AT THE THE CURRENT SLIDE AND I SEE NORTH SATELLITE
IF WE WERE TO DO AN AUDIT ON THE NORTH SATELLITE, AND IAF, WOULD THAT BE OF OUR VENDORS TO SEE WHETHER OR NOT WE WERE CHARGED CORRECTLY OR WHAT IS AN AUDIT OF THOSE PROJECTS LOOK LIKE? YEAH SO SOME OF THESE ARE PROBABLY GOING TO FALL INTO NEXT YEAR
THEY'RE HUGE PROJECTS COMMISSIONER CHO, AS YOU KNOW, TO GIVE SOMETHING A BILLION PLUS DOLLARS IN BOTH
AND THERE'S SO MANY ITEMS ON HERE THAT WE COULD LOOK AT THAT
WE LOOK AT WE'VE BEING BILLED CORRECTLY
THERE'S ACTIVITY, THERE'S CHANGE ORDERS, THERE'S HOURLY BILLING FOR CERTAIN ITEMS AND IT'S A LOT OF WORK AND A LOT OF TIMES ESPECIALLY FOR THESE LARGE AUDITS
AND THAT'S WHY IT'S UNREALISTIC TO, GIVEN WHERE WE ARE THIS YEAR THAT WILL TACKLE IT
BUT YOU'LL PROBABLY FIND IN ANY OF THESE
ANY EXTERNAL PARTY WILL TELL YOU THAT YOU'LL FIND MONEY THAT'S ON THE TABLE THAT'S LEFT ON THE TABLE
SO THAT'S PROBABLY ONE ITEM THAT YOU LOOK
AT WHAT MONIES HAVE BEEN LEFT ON THE TABLE
WHERE HAVE WE BEEN INCORRECTLY BILLED, OR WERE THERE MISTAKES? ANOTHER THING IS CONTRACT LANGUAGE
WHERE WE HAVE THEY LIVED UP THE CONTRACT LANGUAGE AND EVERYTHING
AND IF SO, YOU KNOW WHAT REMEDIES ARE THERE TO THE PORT, AND WHAT DO WE NEED TO WHAT WE NEED TO DO TO RECOUP THOSE
AND AND AN AUDIT GOES THROUGH ALL OF THAT IN DETAIL, AND THAT'S WHAT IT PRESENTS BACK TO YOU
THESE ARE THE ITEMS THAT WE NEED TO RECOUP
SO I THINK IN AN AUDIT OF AN IF, WHICH HAS BEEN ONGOING FOR A LONG TIME, IT'S KIND OF LONG OVERDUE, AND WE'VE HAD MANY ISSUES IT'S LIKE WE SHOULD DO IT NO MATTER WHAT
BUT I GUESS WHAT I WANT TO UNDERSTAND IS, IF WE DON'T GET TO THESE IN 2021, WE WILL STILL ATTEMPT TO DO THESE LIKE IN 2022 OR LATER, CORRECT? THIS IS NOT A DO IT IN 2021 WE'RE NOT DOING AT ALL SITUATION
NOW OUR INTENT IS FOR IAF, BECAUSE OF THE SCALE AND SIZE OF IT, IS WE HAVE RESOURCES IN HOUSE, BUT IT WOULD EXHAUST OUR RESOURCES ON SOMETHING THAT LARGE, SO WE'RE PROBABLY GOING TO COME TO THE COMMISSION, WE'RE GOING TO PUT THIS ON THE PLAN FOR NEXT YEAR BECAUSE OF THE SCALE
SO IAF IS ONE OF THE THAT'LL STICK AND IT'LL BE DONE NEXT YEAR
BUT WE'RE GOING TO COME TO THE AUDIT COMMITTEE AND PROBABLY ASK FOR PROBABLY GET SOME EXTERNAL RESOURCE IN THE FORM OF A CONSULTANT TO HELP US OUT WITH US FOR NAN POWER WHEN WE DO LOOK AT
IT
AND WE'LL COME BACK TO YOU IN THAT
I WILL TALK TO MY TEAM ABOUT IT AND, THEY'RE AWARE THAT WE NEED TO, YEAH I JUST WANTED TO MAKE SURE WE ,WEREN'T BRUSHING OVER IT BECAUSE WE DIDN'T HAVE THE RESOURCES OF THIS YEAR, THANK YOU
THANK YOU COMMISSIONER CHO
MEMBER GIRKY FOR QUESTIONS
NO QUESTIONS FOR ME THANK YOU
THANK YOU, AND THEN COMMISSIONER BOWMAN
NO I THINK THIS LOOKS LIKE A GREAT PLAN I APPRECIATE COMMISSIONER CHO QUESTION ABOUT THE IAF, WHEN I FIRST SAW THAT I THOUGHT THERE'S NO WAY WE'LL BE ABLE TO GET THAT DONE IN 2021
AND GLENN I THINK WHEN WE DO GET TO THE AUDIT OF THE IAF AND PROBABLY THE NORTH SATELLITE, IT WOULD BE GREAT TO TALK ABOUT REALLY SPECIFICALLY WHAT THE SCOPE OF THAT AUDIT IS GOING TO BE
CERTAINLY IN ADDITION TO THE PAYMENTS AND ALL OF THAT, I'M CURIOUS AS TO WHETHER, WHEN WE GET TO THAT POINT, WE CAN TALK ABOUT THE PROCESSES AS WELL
CERTAINLY WE HAVE OUR OUTSIDE REVIEW PANEL THAT LOOKED AT SOME OF THAT, WELL A LOT OF THAT FOR THE IAF, BUT I THINK IT WOULD BE WORTHY TO DO A SIMILAR AUDIT OF THE PROCESSES FOR THE NORTH SATELLITE
SO SOMETHING TO TALK ABOUT WHEN WE GET FURTHER DOWN THE ROAD ADOPTING THAT
I WHOLE-HEARTEDLY AGREE COMMISSION BOWMAN, SO WE WILL COME BACK TO YOU IN THAT WITH A LOT MORE DETAIL SHORTLY
I CAN I MAKE A COMMENT? TO MAYBE CLARIFY THAT THIS IS JANICE ONN, FOR THE NORTH SATELLITE, WE AS PART OF THE REGULATORY RCW REQUIREMENTS, WE DO HAVE AN OUTSIDE AUDITOR THAT HAS BEEN ON BOARD FOR SEVERAL YEARS, BECAUSE THERE ARE REGULATORY REQUIREMENTS FOR AUDIT OF THOSE NEGOTIATED PIECES OF THE CONTRACT, AND THEY HAVE ALSO BEEN LEVERAGED TO TO HELP US WITH REVIEWING OUR MONTHLY BILLING FOR THE NORTH SATELLITE
SO WHEN IT'S TIME FOR THAT PROJECT, THAT IS A POTENTIAL OF LEVERAGING THE OUTSIDE CONSULTANT TO SUPPORT THE INSIDE, IF THAT IS WHAT IS THE DESIRE OF THE COMMISSION AND THE AUDIT OFFICE
SO I THOUGHT I WOULD JUST SHARE THAT WITH YOU
THAT'S GREAT
AND THEN COMMISSIONER BOWMAN, I SEE ANOTHER HAND RAISE
I BELIEVE IT'S STAFF MR SPENCER BRIGHT
THANK YOU MICHELLE
I JUST WANTED TO ADD ON TO WHAT GLENN WAS MENTIONING AND COMMISSIONERS
WE DID PERFORM TWO AUDITS A COUPLE OF YEARS AGO OF THE IAF, AND WE REVIEWED THE NORTH SATELLITE A COUPLE OF YEARS AGO ALSO
AND SO WE CAN PROVIDE THOSE REPORTS TO YOU
YEAH, BUT THOSE WERE EARLY SPENCER'S POINT THOSE EARLY ON BEFORE WE HAD A GMP AND SOME OF THEM LIKE IN OUR FIRST AUDIT, WE SAID YOU KNOW THIS IS A GMP PROJECT AND WE DON'T EVEN HAVE A GMP YET SO THEY WERE BUILDING STEPS
NOW IT'S A LOOK BACK AND SPENCER IS ABSOLUTELY RIGHT, WELL THOSE REPORTS ARE AVAILABLE COMMISSIONER CHO, BUT A DETAILED LOOK BACK ON EVERYTHING THAT'S BEEN DONE IS IMPORTANT
WE ALSO TO JANICE ON'S POINT, YES, JANICE THE FIRM THAT SHE HAS IS VERY CREDIBLE AND VERY SKILLED AND WILL LEVERAGE OFF WE INTEND TO LEVERAGE OFF THEIR WORK
RICH
THANK YOU
NEXT SLIDE
I THINK WE'LL MOVE ON
I'LL JUST ADD ONE MORE THING TO IT
I JUST WANTED TO CALL OUT THAT WHEN THE EXTERNAL REVIEW PANEL WAS LOOKING AT THE IAF, ONE OF THE FINDINGS THAT THEY HIGHLIGHTED, I THINK IT'S REALLY IMPORTANT TO REMEMBER
IS THEY REALLY REFERRED TO IT AS A PROGRAM
AS OPPOSED TO A PROJECT
AND I DO HOPE THAT I BELIEVE THAT THE NORTH SATELLITE SHOULD BE VIEWED THROUGH A SIMILAR LENS
IT'S REALLY A MULTITUDE OF PROJECTS, THAT ARE WORKING UNDER AN OVERALL PROGRAM, AND I THINK YOU JUST VIEW IT A LITTLE BIT DIFFERENTLY WHEN YOU'RE LOOKING AT AN AUDIT BECAUSE THERE'S SO MANY CONTRACTORS INVOLVED IN SO MANY DIFFERENT TIMELINES AND SO MANY DIFFERENT STEPS
SO IT IS QUITE A BIT OF AN UNDERTAKING
BUT APPRECIATE ALL OF THE WORK THAT'S BEEN DONE TO DATE ON THAT
BUT I DO THINK WHEN BOTH OF THEM WRAP UP THERE'S STILL QUITE A FEW LESSONS LEARNED THAT WE CAN APPLY PROACTIVELY ON OTHER PROGRAMS AS WE UNDERTAKE
SAY FOR EXAMPLE THE SOUTH SATELLITE, THE C1 BUILDING BUILD OUT, THOSE SORTS OF THINGS
THANK YOU
WELL WITH THAT I THINK WE WILL MOVE ON TO THE NEXT ITEM, WHICH IS THE OPERATIONAL AUDITS
OKAY SO THIS SLIDE TO MAKE SURE JUST ESSENTIALLY TALK ABOUT THE CHART THAT SHOWS WHERE WE ARE IN OUR AUDIT OF THE YEAR
THE ONES THAT ARE GREEN ARE DONE
ONE YOU KNOW THAT IN YELLOW WERE KICKED OFF ALREADY, AND THEY'RE IN PROCESS
THERE'S A LOT THAT WE HAVEN'T STARTED
THERE'S A LOT THAT WE'RE STARTING RIGHT NOW
SO I CAN SAY COMFORTABLY THAT AS OF RIGHT NOW WE'RE IN GOOD POSITION OF COMPLETING OUR PLAN ON TIME
WHICH IS IMPORTANT TO US ALSO, IT'S IT'S SOMETHING THAT YOU WANT TO MAKE SURE THAT YOU BALANCE THE RIGHT AMOUNT OF RESOURCES AND ARE ABLE TO HAVE MATERIAL AND COVERAGE
SO WE'RE THIS IS WHERE, WE START
NEXT SLIDE PLEASE AND MICHELLE NEXT SLIDE? AND NOW THE OPERATIONAL AUDITS
COMMISSION BOOK SO, ONE SLIDE OFF
SO I'M GOING TO WE'RE GOING TO TALK ABOUT FIVE AUDITS TODAY
ONE WILL BE IN NON PUBLIC SESSION, WHICH WILL ADJOURN TO THE MALWARE DEFENSES, BUT THE OTHER FOUR WILL GO OVER IN COMMISSION IN PUBLIC SESSION HERE
SO MICHELLE THE NEXT SLIDE
AND THEN ONE OF THE THINGS I WANT TO DO COMMISSIONERS, IS I WANT MY MANAGERS, OUR STAFF, TO TALK A LITTLE BIT AS WELL
THEY DO A LOT OF WORK ON THESE, SO I'M GOING TO JUMP IN AND HAVE DAN CHASE INTRODUCE HIMSELF AND SPEAK TO NORTH MONITORING DATA ACCURACY AUDIT
DAN IF YOU COULD UNMUTE YOURSELF
YEAH SO THANKS GLENN, AND GOOD AFTERNOON COMMISSIONERS, MS GIRKY
SO I'M DAN CHASE, AUDIT MANAGER HERE IN THE GROUP
CAN EVERYBODY HEAR ME OKAY I GOT NEW EARBUDS AND I'M GETTING USED TO THEM
YOU SOUND GREAT PERFECT, THANKS
SO I'LL PROVIDE A LITTLE BACKGROUND FIRST ON THE MONITORING PROGRAM
SO THE PORT OWNS 26 TERMINALS THAT MEASURE NOISE EVENTS
AND THE TERMINALS ARE PLACED AS FAR NORTH AS LAKE CITY, AND THEY EXTEND AS FAR SOUTH AS FEDERAL WAY
AND NOISE DATA FROM THE TERMINALS IS THEN PROVIDED TO A THIRD PARTY VENDOR, L3 HARRIS, WHO MATCHES THOSE NOISE EVENTS TO SEATAC FLIGHT DATA
THAT INFORMATION IS THEN PROVIDED BACK TO THE PORT AND WE ARRANGE THE INFORMATION IN A REPORT FORMAT AND POST IT, OR PUBLISH IT, TO THE PORT WEBSITE FOR THE PUBLIC TO VIEW
NEXT SLIDE PLEASE MICHELLE
SO THERE'S A VISUAL OF THE TERMINALS AND I BELIEVE THERE'S 24 HERE
THERE'S ALSO TWO OTHER TERMINAL THAT ARE PORTABLE AREN'T LOCATED THAT AREN'T REFLECTED ON THIS SLIDE, A NICE VISUAL
NEXT SLIDE PLEASE
SO WE I THINK IT'S IMPORTANT TO POINT OUT THAT WE'RE NOT AWARE OF ANY FEDERAL OR REGULATORY FINES OR PENALTIES FOR NOT POSTING COMPLETE OR ACCURATE INFORMATION
THIS IS REALLY A PROGRAM THAT AS A PUBLIC AGENCY WE PROVIDE AS A PUBLIC SERVICE, IF YOU WILL, FOR WHOEVER WANTS TO VIEW IT
WE DID IDENTIFY ONE MEDIUM RATED ISSUE THAT I'LL GO INTO NOW
AND REALLY WHAT WE'RE GETTING AT IS WE WANT MANAGEMENT TO BE A BIT MORE PROACTIVE WHEN WE SEE THAT DATA IS EITHER MISSING OR IT'S INCONSISTENT OR MAYBE INCOMPLETE
SO MOST NOTABLY I'LL GO INTO SOME OF THE EXAMPLES
MONITOR NINE WAS DOWN AND I BELIEVE THAT'S IN THE BEACON HILL AREA, THAT WAS DOWN FOR ABOUT A THREE MONTH PERIOD IN 2020, FROM MAY TO THE FIRST PART OF AUGUST 8TH, OR FIRST PART OF AUGUST
SO IT'S MY UNDERSTANDING THAT THE MONITOR WAS BROKEN AND ACTUALLY NEEDED TO BE REPLACED
AND THAT'S AN EXAMPLE OF WE PROBABLY SHOULDN'T WAIT THREE MONTHS TO IDENTIFY THAT IT ACTUALLY WASN'T WORKING
THERE WERE ALSO SOME INSTANCES WHERE WE LOOKED AT THE DATA AND FOR SEVERAL MONTHS IT'LL BE AT A CERTAIN LEVEL AND THEN FOR A PERIOD OF TIME IT'LL DROP
AND WE'RE NOT EXACTLY SURE WHY THAT DROPS
AND THEN IT GOES BACK UP TO THAT LEVEL AGAIN
SO SOMETHING'S HAPPENING THERE THAT IT MIGHT MEAN THAT WE NEED TO GO OUT AND FIX THE MONITOR, OR IT'S NOT WORKING THE WAY IT'S SUPPOSED TO
THERE ARE INSTANCES THAT MANAGEMENT IS ACTUALLY IDENTIFIED WHERE A FUSE NEEDS TO BE REPLACED, OR THERE'S A POWER OUTAGE, AND I BELIEVE THERE'S A RESET BUTTON ON THE TERMINAL THAT NEEDS TO BE ENGAGED
SO THERE IS REPAIRS AND MAINTENANCE ON THE TERMINAL THAT NEED TO OCCUR
AND AGAIN WHAT WE'VE RECOMMENDED IS THAT MANAGEMENT ESTABLISH A BIT OF A MORE ROBUST MONITORING PROGRAM TO PROACTIVELY IDENTIFY IF A MONITOR NEEDS TO BE REPAIRED
SO I WILL PAUSE THERE, I KNOW WE HAVE STAND SHEPHERD, I THINK ARLAND PERCELL IS ON THE LINE AS WELL TO ADDRESS ANY QUESTIONS YOU HAVE
BEFORE I TURN IT BACK OVER TO THE AUDIT COMMITTEE I DO WANT TO THANK STAN AND HIS TEAM FOR, YOU KNOW, WORKING WITH US VERY WELL AND EMBRACING OUR RECOMMENDATION
IT WORKS REALLY WELL WHEN WE HAVE THAT COOPERATION
SO I WILL TURN IT BACK TO THE COMMITTEE FOR QUESTIONS AND MAYBE STAND AND ARLAND WOULD LIKE TO WALK THROUGH THEIR MANAGEMENT RESPONSE AS WELL
GREAT THANK YOU WELL COMMISSION CLERK HART WOULD YOU PLEASE HAVE MEMBERS PLEASE UNMUTE YOURSELVES AND CALL THE ROLL FOR QUESTIONS
CERTAINLY WE'LL BEGIN WITH COMMISSIONER CHO FOR QUESTIONS
I DON'T WANT TO, HAVE ANY QUESTIONS PER SE, I JUST WANT, WHEN IT COMES TO THE MONITORING DATA I UNDERSTAND HERE THAT WE'RE NOT DOING IT BECAUSE WE'RE BEING FORCED TO DO IT, BUT I DO THINK THAT IT'S A SERVICE THAT WE PROVIDE THAT PROVIDES THE SIGNALS TO OUR COMMUNITIES THAT WE CARE
AND I JUST WANT TO MAKE SURE AND I KNOW IT'S NO ONE'S INTENT, BUT I DON'T WANT THIS TO BE LIKE PERFORMATIVE, WHERE WE'RE CHECKING OFF A BOX
AND WE'RE SAYING YOU KNOW WE'RE DOING IT
RIGHT? BUT I DO WANT THE COMMUNITY TO FEEL LIKE WE'RE BEEN GENUINE IN OUR EFFORT TO PROVIDE SOME DATA
I KNOW THERE'S BEEN SO COMMUNITY MEMBERS WHO HAVE BEEN ASKING US FOR RAW DATA
AND SO I WOULD LIKE FOR US TO MAKE SURE THAT THE DATA THAT WE ARE COLLECTING IS AS ACCURATE AS POSSIBLE, EVEN IF IT'S NOT BEING USED FOR POLICY MAKING PURPOSES PER SE
SO I APPRECIATE ALL THE EFFORT THAT'S BEING MADE HERE AND I HOPE WE CAN KIND OF GET TO THE BOTTOM OF WHY SO WE'RE SEEING SOME INCONSISTENCIES
THANK YOU COMMISSIONER CHO
MEMBER GERKE FOR QUESTIONS
NO QUESTIONS FOR ME THANK YOU
THANK YOU
COMMISSIONER BOWMAN, ITS BACK TO YOU
THANK YOU, I THINK I'LL HOLD MY QUESTIONS AFTER WE HEAR THE MANAGEMENT RESPONSE, BUT I WOULD SAY VERY MUCH UNDERSCORE WHAT COMMISSIONER CHO IS BROUGHT UP, IN TERMS OF WHILE, THIS IS NOT A REQUIREMENT, I DO THINK IT'S REALLY IMPORTANT THAT WE PROVIDE AS MUCH ACCURATE INFORMATION AS POSSIBLE
AND IF SOMETHING GOES DOWN I'M EAGER TO LEARN HOW WE'RE GOING TO BE ABLE TO MANAGE IT SO THAT IT'S NOT DOWN FOR TWO OR 3 MONTHS
PARTICULARLY IN SOME OF OUR HIGHLY SENSITIVE NEIGHBORHOODS LIKE BEACON HILL
SO LET'S MOVE ON TO THE MANAGEMENT RESPONSE THAT WOULD BE GREAT
THANK YOU GOOD AFTERNOON COMMISSIONERS AND MS GIRKY I'M ARLIN PURCELL I'M THE INTERIM SENIOR DIRECTOR OF ENGINEERING ENVIRONMENT AND SUSTAINABILITY
AND I WANT TO START OFF BY SAYING WE REALLY APPRECIATED THE CHANCE TO INTERACT WITH THE AUDIT ON THIS
WE FOUND IT TO BE VERY CONSTRUCTIVE AND WE DEFINITELY AGREED WITH THE CONCLUSIONS THAT THERE ARE OPPORTUNITIES FOR PROACTIVE OVERSIGHT, AND WE'RE ALREADY WORKING ON ON THAT
SO WE HAVE FOUND WAYS TO IMPROVE OUR MONITORING OF THE SYSTEM BY REVIEWING DAILY REPORTS SPECIFICALLY DESIGNED TO CATCH GAPS IN COVERAGE
OUR VENDOR ALSO PERFORMS DAILY SYSTEMS CHECKS TO ENSURE COMPLETENESS OF DATA AND PROMPTLY NOTIFIES OUR STAFF OF ANY ISSUES
WE'VE ALSO STARTED TO IMPROVE OUR PUBLIC INFORMATION BY PLACING DATES AND TIMES OF DATA GAPS ON THE EXTERNAL TABLEAU WEBSITE FOR INCREASED TRANSPARENCY
AND WE HAVE PUT INTO PLACE A SERIES OF REVIEWS TO HELP ASSURE THAT THE DATA THAT IS TRANSFERRED TO OUR BUSINESS INTELLIGENCE UNIT IS AS COMPLETE AS POSSIBLE FOR BEING POSTED
SO I DO UNDERSTAND THAT THE AUDIT FOUND SOME ISSUES WITH RESPECT TO RELIABILITY, BUT THE SYSTEM HAS BEEN REMARKABLY STABLE GIVEN ALL THE EXTERNAL FACTORS AND CHALLENGES INHERENT WITH NOISE MONITORING
WE DO UNDERSTAND THE PUBLIC'S INTEREST IN THE DATA, AND WE ARE COMMITTED TO PROVIDING THE BEST INFORMATION AVAILABLE AND TO TAKING THIS SERIOUSLY AND BEING PROACTIVE, COMMISSIONERS AS YOU BOTH HAVE MENTIONED
CERTAINLY OPEN TO FINDING WAYS TO IMPROVE AND ACTING ON THOSE
AND I JUST WANT TO COMMEND THE INTERNAL AUDIT STAFF MARIA AND DAN JUST GREAT TO WORK WITH AND REALLY TOOK THEIR TIME TO TRY TO UNDERSTAND THE SYSTEM AND THE ISSUES INVOLVED
SO STAN SHEPHERD IS AVAILABLE IF YOU HAVE SPECIFIC QUESTIONS ABOUT THE MONITOR NINE THAT DAN MENTIONED, OR ABOUT ANY OTHER SPECIFIC ISSUES, BUT I WILL STOP HERE FOR NOW, THANK YOU
GREAT I DON'T HAVE ANY ADDITIONAL QUESTIONS I THINK YOU COVERED IT
THANK YOU AND IT'S REASSURING TO KNOW THAT IF I'M UNDERSTANDING YOU CORRECTLY THAT THE STAFF AS WELL AS THE CONTRACTOR LOOKING FOR THOSE GAPS, SO I'M ANTICIPATING THAT THAT WOULD MEAN YOU FEEL LIKE YOU'VE SOLVED THE PROBLEM OF 2 OR 3 MONTHS OF INACCURATE DATA
IF I UNDERSTAND CORRECTLY
YES I REALLY APPRECIATE THE CHANCE TO CORRECT SOMETHING AND PUT A MEASURE INTO PLACE WE HOPE WE'LL TAKE CARE OF THINGS MOVING FORWARD, SO THANK YOU
EXCELLENT THANK YOU
ALL RIGHT WELL IF THERE ARE NO FURTHER QUESTIONS I THINK WE'LL MOVE ON TO THE NEXT ITEM, THE SOUTH KING COUNTY FUNDS
MICHELLE NEXT SLIDE PLEASE
ONE MORE
OKAY COMMISSIONERS, SOUTH KING COUNTY FUND WAS AN AUDIT THAT CAME UP FOR RISK ASSESSMENT THIS YEAR AND BECAUSE OF THE HIGH VISIBILITY THAT WAS ADDED TO THE PLAN
AS THE SLIDE SAYS IT'S IMPORTANT IT HELPS OUT LOCAL COMMUNITIES ESPECIALLY IN SOUTH KING COUNTY, NONPROFITS, COMMUNITIES OF COLOR, HISTORICALLY MARGINALIZED COMMUNITIES, AND SO ON
IT WAS APPROVED BY A MOTION IN 2018, AND THERE'S QUITE A SIGNIFICANT AMOUNT OF MONEY IN THE FUND
ONE OF THE THINGS WE WANT TO HIGHLIGHT THE COMMISSION REQUESTED HAD A LONG DEBATE ON THIS BACK IN 2019, AND REQUESTED THAT ALL SOUTH KING COUNTY FUND MONIES COME TO THE COMMISSION FOR APPROVAL
SO IT DOESN'T FOLLOW THE STANDARD DELEGATION OF AUTHORITY THAT THE PORT HAS AT ALL FUNCTION DO NEED TO COME BEFORE THEL COMMISSION AND THEY GET REVIEWED AND FUNDS TRANSPARENCY THERE AS WELL
ANOTHER THING I WANT TO POINT OUT IS IN THE COURSE OF THIS AUDIT WE LOOKED AT THE RCWS TO MAKE SURE THAT WE WERE COMPLYING WITH THE RCWS BECAUSE THE LAW HAS THE RCWS HAVE SEVERAL REQUIREMENTS FOR ANY SUCH FUND THAT NEED TO BE MET
FOR INSTANCE MONITORING PROCESS THAT NEEDS TO BE PUT IN PLACE TO MAKE SURE THAT THE FUNDS ARE USED FOR THEIR INTENDED PURPOSES
ALSO FOR EXAMPLE, PROCUREMENT RULES NEED TO BE FOLLOWED, AND WE ALREADY HAVE THAT STRUCTURE IN PLACE
BUT WE WANT TO MAKE SURE THAT WE'RE FOLLOWING UP WITH INTERNAL PROCUREMENT RULES WHICH ARE IN LINE WITH THE RCWS AS WELL
SO EVERYTHING'S ALIGNED THERE
WE DID LOOK THROUGH THAT AND WE LOOKED AT ALL THE PROJECTS ALL THE FUNDING THAT WAS GIVEN OUT BY BOTH BOOKTA'S TEAM, AND BOOKTA'S AND PIERCE'S TEAM AND BY ECONOMIC DEVELOPMENT AND THEN VERIFY THAT THOSE WERE IN COMPLIANCE
WE ALSO LOOKED AT ALL THE WORK THAT LEGAL HAD DONE, AND OUR INTERNAL LEGAL DEPARTMENT SCRUTINIZED US QUITE A BIT, AND MADE SURE THAT ALL OF THOSE RULES AND RECOMMENDATIONS ARE FOLLOWED AS WELL
NEXT SLIDE PLEASE
WE DID HAVE ONE ISSUE THAT WE FOUND THAT WERE THE TWO ITEMS THAT WERE GIVEN OUT BY ECONOMIC DEVELOPMENT TWO AWARDS, AND THOSE AWARDS FAILED TO MAKE IT TO COMMISSION
MOSTLY BECAUSE PEOPLE AREN'T AWARE OF THE PROCESS AND THE REQUIREMENTS, SO THAT WAS EASY FIX GOING FORWARD
ONE OF THE THINGS LEGAL AND EXECUTIVE DIRECTOR METRUCK RECOMMENDED THAT AS A FORMALITY, THESE SHOULD GO BACK TO THE COMMISSION FOR APPROVAL EVEN AFTER THE FACT
SO THESE WILL COME BACK TO COMMISSION FOR THAT
YOU KNOW ANOTHER THING THAT WE ALTHOUGH NOTHING WAS NON COMPLIANCE AS FAR AS MONITORING PROCESS AND SOME OF THE OTHER THINGS THAT ARE REQUIRED FOR RCW,THEY'RE NOT AS FORMALIZED IF YOU DON'T IF YOU HAVE OTHER DEPARTMENTS
AND I'M NOT SINGLING OUT ECONOMIC DEVELOPMENT HERE, BUT ANYONE ELSE OF THEIR ORGANIZATION COULD MISS SOMETHING, AND THEN YOU RUN THE RISK OF POTENTIALLY NOT BEING IN COMPLIANCE
SO MY NEXT SLIDE, DECK FIVE PLEASE, AND OUR RECOMMENDATION SAYS YOU KNOW SINCE THIS FUND IS PRIMARILY MANAGED BY TWO SENIOR DIRECTORS BOOKTA, PIERCE, BOOKTA KASAR, AND EDWARDS THAT EVERYTHING SHOULD FLOW THROUGH THEM
WHEN THINGS ARE OUTSIDE, IN THE INSTANCE OF THE EXCEPTIONS WE FOUND, THE PORT WEBSITE IS WRONG, AND IT'S NOT UPDATED CORRECTLY
SO WE'RE NOT REFLECTING TO THE PUBLIC WHAT WE'RE SPENDING CORRECTLY EITHER ON THE FUND
SO BY HAVING EVERYTHING FLOW THROUGH THE TWO CO SPONSORS, ONE WE ASSURE THAT COMMISSION REQUIREMENTS MET
TWO, ASSURE THAT RCW REQUIREMENTS ARE MET
AND THREE, WILL BE TRANSPARENT WITH THE PUBLIC
SO THAT'S WHAT WE'RE RECOMMENDING, THAT I BELIEVE WHAT BOOKTA AND PIERCE HAS AGREED TO
AND YOU KNOW I AS FAR AS THEIR RESPONSE GOES THEY'VE AGREED TO, BOOKYS OR PIERCE, EITHER IF IS ON THE LINE, MAYBE THEY CAN PROVIDE THEIR RESPONSE
SURE I'M ON BOOKTA, I DON'T KNOW IF YOU'RE ON, I'M HERE TOO PIERCE
WE CAN BOTH TO THAT POINT, YEAH SURE
I'LL JUST JUMP INTO IT AND IF I MISS ANYTHING BOOKTA , PLEASE LET ME KNOW
FIRST OF ALL GLENN THANK YOU AND GOOD AFTERNOON COMMISSIONERS, MISS GIRKY
AND GLENN
THANK YOU TO YOU AND YOUR TEAM FOR THE REVIEW OF THIS
THE FINDINGS HAVE BEEN VERY HELPFUL AND WE WOULD AGREE WITH THE RECOMMENDATIONS THAT YOU AND YOUR TEAM PUT FORWARD
OBVIOUSLY WE'RE VERY PROUD OF THE WORK THAT WE'VE BEEN ABLE TO ACCOMPLISH WITH A VERY COMPLICATED PROGRAM THAT SHIFTED SIGNIFICANTLY IN ITS SCOPE WITH THE COVID 19 ECONOMIC RECOVERY WORK
AND WE HAVE PUT IN PLACE OR ARE PUTTING IN PLACE THE RECOMMENDATIONS THAT GLENN DAN AND JENNIFER SUGGESTS TO US DURING THE REVIEW OF THE SOUTH KING COUNTY FUND
IT'S ALWAYS GREAT TO HAVE THESE REVIEWS AND DEFINED OPPORTUNITIES FOR PROCESS IMPROVEMENTS AND I THINK THAT NEXT TIME WE GO THROUGH THAT THIS WILL BE PRETTY RISK FREE AS FAR AS ANY PROCESS ISSUES ARE CONCERNED
BOOKTA IF YOU WANT TO JUMP IN, I KNOW DAVE, YOU ALSO AS WELL HAD A RECOMMENDATION TO PUT FORWARD FOR YOUR GROUP, AND IT'S IT'S GRANTS UNDER THE ECONOMIC DEVELOPMENT
PIERCE, I WOULD JUST ADD THAT ABSOLUTELY I WANT TO THANK GLENN AND ALL OF YOUR TEAM FOR THE INCREDIBLE WORK YOU'VE DONE
THIS WAS A VERY HEAVY LIFT FOR PIERCE, MYSELF, AND OUR TEAM
WE'VE LEARNED A LOT IN THE LAST YEAR AND A HALF AND WE WORK SO CLOSELY WITH THE LEGAL AND CPO TEAM WHO ALSO WORKED VERY HARD TO MAKE THIS HAPPEN .AND WE'VE LEARNED MANY LESSONS ABOUT HOW WE WANT TO DO THINGS DIFFERENTLY MOVING FORWARD
WE THANK YOU FOR ALL OF YOUR RECOMMENDATIONS AND I THINK AS PIERCE SAID, JUST A COUPLE OF THINGS THAT THE THREE ACTIONS SPECIFICALLY IS BUDGET ALLOCATION AND TRACKING FOR SOUTH KING COUNTY FUND WILL ALL BE SEEN BY ASSISTANT TO PIERCE EDWARDS
OUR TWO CO PROJECT MANAGERS ALISON BISON ON MY TEAM, ANDY GREGORY ON PIERCES TEAM, WILL REVIEW ALL INVOICES AND TRACK ON SPENDING OUT OF SOUTH KING COUNTY FUND, AND WILL DIRECT THE INVOICES TO PIERCE'S ASSISTANT
AND THEN SECOND IS CPO DIRECTOR WILL BE INFORMED ANNUALLY AS WE ALLOCATE DOLLARS FOR SOTH KING COUNTY FUNDS SO THEY KNOW WHAT TO EXPECT FOR THE YEAR, AND THEY CAN HAVE DETAILED INFORMATION AS QUICKLY AS POSSIBLE FOR THE WORK THAT'S AHEAD, BUT ALSO OF COURSE WE'LL BE VERY CLOSE WORKING WITH THEM CLOSELY AS WE IDENTIFY CONTRACTS AND PROGRAMS THAT WE'LL BE WORKING, WE'LL BE FINALIZING AND MOVING FORWARD
AND COMMUNICATIONS MATERIAL ALL WILL BE UPDATED TO REFLECT THE ENTIRE PROGRAM SPENDING FROM SOUTH KING COUNTY FUND
AND WE WILL WORK CLOSELY WITH DAVE MCFADDEN AND MEANN RICE TO STAY SUPER INFORMED WITH WHATEVER AMOUNTS OUT OF SOUTH KING COUNTY FUND ARE ALLOCATED TO DAVE MCFADDENS PROGRAM
TO SUPPORT SMALL BUSINESS CAPACITY BILLING AND GET REGULAR UPDATES BUT THE ENTIRE PROCESS WOULD BE ONE FROM PIARCE ABD MY OFFICES
ALRIGHT, THANK YOU FOR THAT
WILL CLERK HART, WOULD YOU MIND, COMMISSIONERS AND COMMITTEE MEMBERS IF YOU CAN UMUTE YOURSELVES, AND CLERK HART, IF YOU CALL THE ROLL FOR QUESTIONS
CERTAINLY COMMISSIONER BOWMAN ,I DO SEE MR MCFADDEN HAND JUST CAME UP, DO WE WANT TO HEAR FROM HIM FIRST? SURE OF COURSE, I DID WANT TO CONTRIBUTE TO THE MANAGEMENT RESPONSE, APPRECIATE WHAT PIERCE AND BOOTKA SAID
I PUT ON SOME TIMING TO THIS THAT I THINK IS MATERIAL TO THIS CONVERSATION AND THAT I WAS PAYING ATTENTION TO THE COMMISSION'S MOTION ON SOUTH COUNTY FUND PROBABLY IN 2019 AND DID NOT REMEMBER THIS ADDED MOTION IN '20
I WAS MORE DRIVEN AND WE HAD NO PLANS TO SPEND SOUTH COUNTY FUNDS TO SUPPORT SMALL BUSINESS RECOVERY UNTIL YOU PASS THE RECOVERY MOTION IN THE SPRING AND DIRECTED US TO LOOK AT RESOURCES INCLUDING SOUTH COUNTY FUND AS A TOOL FOR RECOVERY
AND IN THAT MOTION THE TIMING WAS IMPORTANT OF GETTING RESOURCES OUT THE DOOR AND SO THAT'S WHAT WE HEARD AND THAT'S WHERE WE STARTED LOOKING AT SOUTH COUNTY FUND TO PROVIDE SOME SMALL BUSINESS RELIEF AND RECOVERY SOUTH COUNTY
I'M SORRY A DOG
OKAY
MISSED A BEAT BUT WE'VE BEEN THROUGH TWO STATE AUDITS WITH OUR OTHER GRANT PROGRAMS WE'VE HAD NO FINDINGS WE DO HAVE CONFIDENCE IN OUR ABILITY TO ADMINISTER GRANTS WE WEREN'T AWARE OF THE INTERNAL REQUIREMENT
THAT'S ALL I HAVE, SORRY
THERE'S ONE HECK OF A HOUND DOG YEAH
LET'S GO TO COMMISSIONER CHO FOR QUESTIONS
I REALLY APPRECIATE THE LESSONS LEARNED I THINK
THIS IS FIRST ROUND OF DOING THIS AND I JUST WANT TO REMIND EVERYONE THAT, AND I THINK AS WE CONTINUE TO DO THIS WE'RE GOING TO KEEP LEARNING
AND SO I APPRECIATE EVERYONE'S KIND OF AGILITY ON THIS
AND I IMAGINE AS WE GO FORWARD WITH THE SUBSEQUENT ROUNDS OF THESE FUNDS, WE'RE GOING TO KEEP CONTINUING TO LEARN THINGS
AND SO I JUST APPRECIATE PIERCE, BOOKTA, AND DAVE FOR KIND OF ROLLING WITH THE PUNCHES HERE, AND MAKING THIS FUN POSSIBLE, BECAUSE I KNOW THAT THERE MAY HAVE BEEN SOME PUSHBACK WHEN IT WAS INITIALLY CONCEIVED, OBVIOUSLY I WASN'T HERE FOR THAT, BUT I'M REALLY EXCITED TO SEE HOW THIS FUND CAN GROW GOING FORWARD AFTER ALL THESE LESSONS LEARNED, SO THANK YOU
THANK YOU COMMISSIONER CHO MOVING TO MEMBER GIRKY FOR QUESTIONS
NO QUESTIONS FOR ME, THANK YOU
THANK YOU, COMMISSIONER BOWMAN
HI, JUST A COUPLE OF QUESTIONS, AND DAVE THANK YOU FOR PROVIDING THAT ADDITIONAL CONTEXT, THAT'S HELPFUL
I'M JUST CURIOUS ABOUT THE TWO ORGANIZATIONS THAT RECEIVE FUNDING FROM THIS FUND
IF WE COULD GO BACK TO THAT, MAYBE COULD YOU JUST PROVIDE A LITTLE BIT OF DETAIL ABOUT THE ORGANIZATIONS AND WHAT THE OUTCOMES WERE ASSOCIATED WITH THE FUNDING
HAPPY TO DO THAT, I THINK YOU'RE FAMILIAR, OUR FIRST CONTRACT WAS THE HIGHLINE SMALL BUSINESS DEVELOPMENT CENTER, THAT ACTUALLY CAME TO COMMISSION FOR APPROVAL AND JUST ANCHORED SMALL BUSINESS RELIEF IN THAT SOUTH COUNTY AREA
THEN WE'VE CONTRACTED WITH THE U S DEPARTMENT OF TRANSPORTATION, TRANSPORTATION RESOURCE CENTER
THEY'RE ONE OF A NATIONAL ORGANIZATION THAT PROVIDES TECHNICAL ASSISTANCE, SMALL BUSINESSES ESPECIALLY, DISADVANTAGED BUSINESS ENTERPRISES
HAVE A LOT OF GREAT TRAINING PROGRAMS THEY'RE PROBABLY MORE ADVANCED THAN OUR PORT TREND CLASSES .AND SO WE CONTRACTED WITH THEM TO OFFER A SERIES OF MORE ADVANCED PORT TYPE SEMINARS TO OUR SMALL BUSINESS PARTNERS
THAT ALL UNFOLDED BETWEEN, IT HAPPENED LAST FALL
AND WE HAD A TYPICALLY I THINK WE HAD 95 WINDY BUSINESSES ATTENDING THOSE PRETTY CONSISTENTLY
SO THAT'S A PIECE OF IT
AND
I WORK YES TO SOMETHING CALLED "FIND VENTURES", FIND VENTURES IS WE JUST KICKED OFF A NEW MINORITY BUSINESS ACCELERATOR, AND WE PICKED THEM THROUGH A PROCUREMENT TO MANAGE THAT PROGRAM WITH US
AND FIND VENTURES IS A FIRM THAT IS ULTIMATELY ORGANIZED AND OWNED BY ELIZABETH SCALLLIN AND SO WE HAD
SHE WON THE PROCUREMENT AND ALSO BROUGHT ALL THAT EXPERIENCE FROM OUR MARITIME ACCELERATOR
AND SO WE JUST STARTED THAT, COMMISSIONER BOWMAN, AND HAVING JUST ADVERTISING THE OPPORTUNITY AND TAKING APPLICATIONS AT THIS POINT
AND THEN THE ECONOMIC LINES? OR NO THAT'S THE ONE THAT SORT OF STOOD OUT BECAUSE THIS WAS THE SOUTH KING COUNTY FUNDING
I WAS CURIOUS IF THAT FELL IN THERE
SORRY, THAT DID RAISE A QUESTION
THAT IS WHERE WE GET THE RESOURCE FROM THE US DEPARTMENT OF TRANSPORTATION RESOURCE CENTER, aND THEY HAVE A SUB CONTRACT TO PROVIDE RESOURCES IN WASHINGTON STATE THROUGH THE ECONOMIC ALLIANCE
THE SERVICES THAT WERE IN THE NAME OF THE U S DEPARTMENT OF TRANSPORTATION RESOURCE
IN THAT'S CORRECT
RIGHT, tHANK YOU FOR THE ADDITIONAL DETAIL, I REALLY APPRECIATE IT
WELL TO ECHO COMMISSIONER CHO POINTS, YOU REALLY DID ALL WORK AND VERY QUICKLY TO GET THIS MONEY OUT THE DOOR BUT I DO APPRECIATE THAT WE DID THE AUDIT AND THAT YOU'RE TAKING TO HEART SOME OF THE FINDINGS
I THINK THE PURPOSE THAT WE VERY INTENTIONALLY PUT IN THERE IS A COMMISSION TO HAVE THE COMMISSION AUTHORIZE, OR APPROVE I SHOULD SAY, THE FINAL PROJECT WAS FOR THAT REASON, TO MAKE SURE THAT WE ALL FELT COMFORTABLE ABOUT THE PURPOSE AND THE ORGANIZATIONS THAT THEY WERE GOING TO
I THINK LESSONS LEARNED ON THAT AND LOOK FORWARD TO MAKING SURE THAT AS WE DO FURTHER ROUNDS OF SOUTH KING COUNTY FUND, WILL THOSE CONTROLS WILL BE IN PLACE
ALRIGHT WELL IF THERE ARE NO FURTHER QUESTIONS I THINK WE'RE GOING TO MOVE ON TO THE CENTRAL TERMINAL
OKAY COMMISSIONER.
THANK YOU
THE NEXT AUDIT, CENTRAL TERMINAL INFRASTRUCTURE UPGRADE, WE HAVE A CATALOG MANAGER SPENCER BRIGHTNESS TEAM THAT DID THIS, AND WORKED IN THIS, JUST LIKE DAN SPOKE EARLIERM THIS IS SPENCERS TIME TO PRESENT HIS AUDIT TO YOU AND TELL YOU A LITTLE BIT ABOUT WHAT HE DID AND WHAT HE FOUND, SPENCER IF YOU CAN UNMUTE YOURSELF AND PRESENT, IT'S ALL YOURS
THANK YOU GLENN
GOOD AFTERNOON COMMISSIONERS, MISS GIRKY
BACKGROUND ON THE CENTRAL TERMINAL IN PRESENTION
CAN YOU INTRODUCE YOURSELF OR THE RECORD
YEAH I'M SORRY SPENCER BRIGHT, MANAGER INTERNAL AUDIT, AND I OVERSEE THE CAPITAL AUDITS
SO SOME BACKGROUND ON THE CENTRAL TERMINAL PROJECT, IT ADDED 10,000 SQUARE FEET OF DINING AND RETAIL SPACE TO THE AIRPORT AND A VERTICAL CIRCULATION SYSTEM
THE ORIGINAL CONTRACT, WHICH WAS AWARDED TO OSBOURNE CONSTRUCTION FOR 9.3 MILLION
BECAUSE OF CHANGE ORDERS THE FINAL CONSTRUCTION COST WILL BE APPROXIMATELY 12.1 MILLION
WE ACTUALLY PERFORMED TWO SEPARATE AUDITS OF THIS PROJECT THROUGH THE ENTIRE LIFE CYCLE THE FIRST AUDIT COVERED PRE CONSTRUCTION WHICH INCLUDED THE BIDDING PROCESS AND THE DESIGN PHASE
AND THAT AUDIT WAS PRESENTED TO THE COMMITTEE LAST DECEMBER
THIS AUDIT FOCUSED ON THE CONSTRUCTION AND THE CLOSEOUT PHASES
WITHIN THIS AUDIT WE REVIEWED FOUR AREAS
COMPLIANCE WITH THE SMALL BUSINESS UTILIZATION, OR NOT COMPLIANCE, BUT THE SMALL BUSINESS UTILIZATION GOALS AND THE CLOSE OUT PROCESS
WITHIN THOSE TWO AREAS WE DIDN'T IDENTIFY ANY ISSUES THAT WARRANTED ANY RECOMMENDATION BE INCLUDED IN THE AUDIT REPORT
THE TWO OTHER AREAS WE LOOKED AT WERE CHANGE ORDERS AND THE PORT MONITORING OF CRITICAL MILESTONES
AND THOSE TWO AREAS WE DID PROVIDE SOME FINDINGS AND RECOMMENDATIONS TO MANAGEMENT
NEXT SLIDE PLEASE MICHELLE
SO FOR THE FIRST ISSUE IT'S OUR HIGHEST RATED ISSUE
OUR TESTING IDENTIFIED APPROXIMATELY 18,000 DOLLARS IN OVER BILLING
ALL OF THESE OVER BILLING, WENT THROUGH FORCE ACCOUNT CHANGE ORDERS
AND FORCE ACCOUNT CHANGE ORDER IS IT A CHANGE ORDER THAT'S ISSUED ON AND NOT TO EXCEED BASIS
USUALLY IN SITUATIONS WHERE A ESTIMATED COST OF THE WORK IS NOT KNOWN AT THAT TIME, BUT THE CHANGE WORK NEEDS TO PROCEED
CONTRACTOR TRACKS THEIR EXPENSES ON A DAILY BASIS, AND THEN UPON COMPLETION OF THE CHANGE ORDER WORK ,THE PORT ISSUES A SEPARATE CHANGE ORDER TO RECONCILE THE DIFFERENCE BETWEEN THE ORIGINAL AMOUNT, THE NOT TO EXCEED AMOUNT, AND THE CONTRACTORS COSTS
WE DID PROVIDE PROCESS IMPROVEMENT RECOMMENDATIONS TO THE CM GROUP AND RECOMMEND THAT ANY AMOUNTS DUE, THE PORT SEEK ANY AMOUNTS DUE
AND THEN NEXT SLIDE PROVIDE SOME DETAILS ON WHAT WE FOUND
SO THE MAIN AREAS THAT WE FOUND OVER BILLING INCLUDE OVERTIME RATE CHARGE TO THE PORT, INCORRECT NUMBER OF HOURS FOR A PARTICULAR SALARIED EMPLOYEE
WHEREAS THE CONTRACTOR PAID THIS EMPLOYEE REGULAR RATE AT EIGHT HOURS A DAY
WE NOTICED IN ONE INSTANCE WHERE THERE WAS A DOUBLE COUNTING OF DAILY FORCE ACCOUNT FIELD DOCUMENTS THAT WERE PROVIDED
AND WE NOTICED TIME WHERE THE PORT WAS BILLED FOR COVID 19 SAFETY SUPERVISOR THAT WAS REQUIRED ONCE THE COVID PANDEMIC OCCURRED
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AND I PROVIDED A COUPLE OF EXAMPLES IN THIS EXAMPLE THE PORT ACCOUNT FIELD DOCUMENTS THERE WERE COPIES PROVIDED WITH ONLY THE DATES CHANGED TYPE SIGNATURE FROM THE CONTRACTOR INSTEAD OF AN ORIGINAL SIGNATURE WHICH I WOULD HAVE LIKED TO HAVE SEEN
FOR EACH ONE OF THESE IN THIS EXAMPLE THE PORT WAS BILLED FOR 12 HOURS PER DAY AT THE OVERTIME RATE FOR THE SUPERINTENDENT
AND THEN AS I HAD MENTIONED ALTHOUGH THE SUPERINTENDENT WAS A SALARY EMPLOYEE
NEXT SLIDE PLEASE
SO SPENCER ON THAT PREVIOUS SLIDE IF YOU CAN ALSO EXPLAIN THE SUPERINTENDENT WAS BILLED AT 12 HOURS OVERTIME RATE WHEN THEY SHOULD HAVE BEEN BILLED AT HOW MUCH FOR THE DAY
THE REGULAR RATE THAT WAS APPROVED
THE TWO RATES EXACTLY THERE IS A PREMIUM RATE
OR OVER TIME
AND THEN THE REGULAR RATE
AND BECAUSE THE CONTRACTOR AND ON FORCE ACCOUNTS IT'S BASED ON ACTUAL COSTS BECAUSE THE SUPERINTENDENT WASN'T PAID BY HIS EMPLOYER ANY OVERTIME RATE, THEN WE SHOULDN'T HAVE BEEN BILLED FOR THAT OVER TIME RATE
OKAY AND NEXT SLIDE PLEASE
HERE'S AN EXAMPLE OF THIS IS OUR PARKING GARAGE RECEIPT THAT WAS SUBMITTED AS PART OF THE SUPPORTING DOCUMENTS FROM OSBORNE
IN THIS PARTICULAR CASE THIS PARKING GARAGE RECEIPT SHOWS THAT THIS IS FOR THE COVID SUPERVISOR ENTERED THE PARKING GARAGE AROUND 5 30 AM AND LEFT AT 9 30 A M
SO THAT'S FOUR HOURS ON SITE HOWEVER ON THAT PARTICULAR DAY THE PORT WAS BILLED FOR EIGHT HOURS
IN ADDITION WHEN WE COMPARED SUPERVISORS, THIS SAFETY SUPERVISORS TIMESHEETS THAT WE OBTAINED FROM OSBORNE, WE ALSO NOTED INSTANCES WHEN THE PORT WAS BEING BILLED FOR HOLIDAYS, SUCH AS THE JULY THIRD, WHICH WAS INDEPENDENCE DAY HOLIDAY OBSERVED
WE ALSO NOTICED A PARTICULAR WEEKS OR PARTICULAR DAYS IN A WEEK THAT THE SUPERVISOR WASN'T ON SITE OR WASN'T WASN'T CODED TO THIS PARTICULAR PROJECT
MAYBE ON VACATION OR COULD HAVE BEEN WORKING ON ANOTHER OSBORNE PROJECT BUT WE WERE BILLED
I'M NOT QUITE SURE THE REASON
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THIS IS OUR SECOND RECOMMENDATION THAT WE HAVE
SO THERE WERE FOUR CRITICAL MILESTONES IN THIS PROJECT THAT NEEDED TO BE SUBSTANTIALLY COMPLETED BY SPECIFIC DATES
IN ORDER FOR THE PROJECT TO REMAIN ON SCHEDULE
WHEN MILESTONES WERE NOT MET, THE PORT WAS ENTITLED TO ASSESS LIQUIDATED DAMAGES AGAINST OSBORNE FO FOR THE ADDITIONAL COSTS THE PORT WOULD INCUR
IN OSBORNE DO NOT MEET COMPLETION DATES FOR IN ANY OF THE FOUR MILESTONES, AND SO INSTEAD OF ASSESSING LIQUIDATED DAMAGES THE PORT ISSUED MULTIPLE FORBEARANCE LETTERS
AND THE PURPOSE THE REASON FOR A FORBEARANCE LETTER PROVIDED OSBORNE ADDITIONAL DAYS TO COMPLETE THE MILESTONE AND PROVIDE THE PORT WITH DOCUMENTATION JUSTIFYING WHY THE MILESTONE WAS NOT MET
IF THE PORT DID NOT ACCEPT THE JUSTIFICATION, IT WAS ENTITLED TO ASSESS LIQUIDATED DAMAGES BACK TO THE DATE THAT THE MILESTONES WERE SUPPOSED TO BE FINISHED
IN TWO CASES THE MILESTONES WERE NOT COMPLETED EVEN BY THE FORBEARANCE LETTER DATE REQUIREMENT AND IN ALL FOUR CASES OSBOURNE DO NOT SUBMIT REQUIRED DOCUMENTATION FOR JUSTIFICATION
NEXT SLIDE PLEASE AS OF THE REPORT DATE, WE CALCULATED LIQUIDATED DAMAGES THAT COULD BE APPROXIMATELY 900,000 DOLLARS
HOWEVER THE CONSTRUCTION MANAGEMENT GROUP IS REVIEWING DOCUMENTATION THAT OSBOURNE HAS PROVIDED AFTER THE FACT AND IT IS LIKELY THAT THE CM GROUP WILL LIKELY EXCUSE QUITE A FEW OF THESE DAYS WITHIN EACH MILESTONE
AND SO THAT WILL PROBABLY DECREASE OR EVEN ELIMINATE ANY LIQUIDATED DAMAGES
OVERALL THE KEY POINT OF THIS ISSUE TO ME IS THE CONSIDERABLE AMOUNT OF TIME THAT HAS PASSED SINCE THE COMPLETION OF THESE CRITICAL MILESTONES
FOR EXAMPLE
MILESTONE ONE WAS FINISHED TWO YEARS AGO AND SO RELIANCE IS GOING TO BE PLACED PRIMARILY ON THE INFORMATION THAT'S PROVIDED BY OSBORNE
AND THERE'S A POTENTIAL THAT SOME OF THE DAYS THAT MAY BE EXCUSED NOW MIGHT NOT HAVE BEEN APPROVED DURING THE PROJECT
IN ADDITION, IF THE PORT ENFORCED THESE MILESTONE DATES OR EVEN THE REQUIREMENTS WHEN FORBEARANCE LETTER WAS ISSUED DURING THE PROJECT, THERE'S A POSSIBILITY THAT OSBORNE MAY HAVE BEEN MORE DILIGENT IN COMPLETING THE MILESTONES AND ULTIMATELY THE PROJECT SOONER
WHICH WOULD HAVE ALSO RESULTED IN LOWER SOFT COST TO THE PORT BECAUSE AS THE PROJECT GOES ON THE PORT CAST TO KEEP OUR STAFF YOU KNOW THEIR STAFF THEIR GROUP TO OVERSEE THE PROJECT
AND NEXT SLIDE
CAN WE GO DOWN TWO SLIDES PLEASE, ONE MORE
IN BOTH OF OUR FINDINGS, RECOMMENDATIONS, MANAGEMENT CONCURRED AND HAS STARTED TO REMEDY SOME OF THESE ISSUES
AND SO JANICE ZAHN, THE ASSISTANT DIRECTOR OF ENGINEERING IS AVAILABLE TO DISCUSS IN MORE DETAIL THEIR ACTION PLAN, AND I CAN HAND IT OVER AND AFTER ANY QUESTIONS FROM THE AUDIT COMMITTEE
MAYBE OKAY YEAH LET'S HEAR FROM JANICE FIRST AND THEN TAKE QUESTIONS
YES, THANK YOU
I WANT TO THANK GLENN SPENCER NIKITA FOR THEIR WORK ON THIS AUDIT
WE ALWAYS APPRECIATE WORKING IN PARTNERSHIP AND GETTING RECOMMENDATIONS FOR HOW WE CAN BE CONTINUOUSLY IMPROVING IN OUR PROCEDURES AND OUR WORK
AND IN THIS PARTICULAR CASE THIS WAS THE FIRST CONTRACT WITH THIS PARTICULAR CONTRACTOR TO THE PORT, AND I APPRECIATE THE FACT THAT AS YOU REACHED OUT TO THE CONTRACTOR TO RECEIVE ADDITIONAL INFORMATION THAT WE DON'T CUSTOMARILY REQUIRE FROM THE CONTRACTOR LIKE DISCREET INDIVIDUAL TIME CARDS, THAT YOU IDENTIFIED SOME AREAS WHERE THE CONTRACTORS RECORDS THAT THEY SUBMITTED TO US FOR REIMBURSEMENT WAS INCORRECT, AND RESULTED IN OVER BILLING THAT WE'RE LOOKING AT
AND IN ADDITION MAKING SURE THAT FOR THEIR WORKERS THAT THERE IS NO UNDERPAYING OF THEIR WAGES SO IF THERE WAS A CARPENTER THAT WORKED OVER TIME, THEN WE WANT TO MAKE SURE THAT THEY ARE PAYING THAT WORKER FOR THE OVERTIME AND THAT WE ARE REIMBURSING FOR THOSE COSTS
SO I APPRECIATE THE FACT THAT THROUGH THE ADDITIONAL INFORMATION THAT WAS REQUESTED FROM THE CONTRACTOR, THAT THIS WEAKNESS, OR AREA, CAME TO LIGHT
WE RELY ON THE CONTRACTOR TO TURN IN FACTUALLY CORRECT INFORMATION TO US FOR REIMBURSEMENT, AND IN THE CASES THAT YOU HIGHLIGHTED WE DO HAVE AN INSPECTOR THAT IS ON SITE DAILY, AND THAT'S THE PERSON IN OUR GROUP THAT SIGNS OFF ON WHAT THEY OBSERVE, oF NUMBER OF WORKERS AND HOURS ON SITE
AND THEN WHEN THE MONTHLY BILLINGS COME WE RELY ON THE CONTRACTOR OR HAVE TO MAKE SURE THAT THEY'RE NOT BILLING US FOR PEOPLE THAT ARE SALARIED WORKERS AND CHARGING US FOR OVER TIME
SO YOUR RECOMMENDATION ABOUT MAKING SURE THAT WE ARE RECEIVING ADDITIONAL INFORMATION FOR WHO ARE SALARIED WORKERS VERSUS HOURLY IS ONE OF THE PIECES THAT WE ARE UPDATING OUR FORCE ACCOUNT PROCEDURES TO MAKE SURE THAT WE RECEIVE THAT INFORMATION, SO THAT THE RECORDS THAT WE HAVE WE CAN VERIFY THAT WE DON'T HAVE THIS CASE IN THE FUTURE
SO THAT'S ONE OF THE PIECES, AND THE OTHER ONE, WELL, SO JUST TO CLOSE THIS PROJECT, WE ARE IN THE MIDDLE OF EVALUATING ALL OF THE COST INFORMATION AND MAKING SURE THAT WE ISSUE A DEDUCTIVE CHANGE ORDER FOR ANY OVER PAYMENTS THAT WE'VE MADE TO THIS PARTICULAR CONTRACTOR
AND IN ADDITION TO THAT, WE ARE MAKING SURE THAT IN OUR NEXT REGULAR MEETING WITH THE ASSOCIATION OF GENERAL CONTRACTORS AND THE BEST PRACTICE, THAT WE REINFORCE TO THEM THE IMPORTANCE OF TURNING IN FACTUALLY CORRECT INFORMATION
SO THE THE COST RELATED TO THE COVID SUPERVISOR THAT WAS ALSO INFORMATION THAT AUDIT WAS ABLE TO DRILL DOWN WITH THE PARKING RECEIPT TO IDENTIFY A POTENTIAL ISSUE OF AN INCORRECT BILLING TO THE PORT THAT WE DO NOT IN OUR NORMAL COURSE OF FORCE ACCOUNT VERIFICATION, DRILL DOWN TO THAT LEVEL OF GATHERING INFORMATION
SO THIS IS PART OF OUR UNDERSTANDING ABOUT WHERE SOME OF THESE RISK MIGHT BE FOR FUTURE REFINEMENT TO OUR FORCE ACCOUNT PROCEDURES
AND THEN RELATED TO THE SCHEDULE PIECE, I AGREE WITH YOUR RECOMMENDATION THAT IT IS ALWAYS BEST PRACTICE TO BE ABLE TO RECONCILE MILESTONES AS QUICKLY AS POSSIBLE
I WILL SAY THAT IT IS OUR PRACTICE THAT IF A MILESTONE IS NOT MET, THAT WE FORBEAR TO GIVE THE CONTRACTOR AND THE PORT AN OPPORTUNITY TO MAKE SURE WE'RE REALLY CLEAR ABOUT THE CAUSES OF THE DELAY, SO THAT WE DON'T COLLECT LIQUIDATED DAMAGES IF WE DO HAVE A ROLE IN THE DELAY
BECAUSE WHEN WE LOOK AT OUR SCHEDULE WE LOOK AT IT FROM THE STANDPOINT OF IS THAT TIME EXCUSABLE BECAUSE THE PORT PLAY A ROLE IN THE DELAY
IS IT CONCURRENT WHERE WE CAUSE SOMETHING THE CONTRACTOR ALSO CAUSE SOMETHING
IS IT SOLELY THE PORT RESPONSIBILITY IN WHICH CASE THE CONTRACTOR IS ENTITLED TO EXTENDED OVERHEAD FROM THE PORT, OR IS IT ONE THAT THE PORT OR THE CONTRACTOR IS SOLELY RESPONSIBLE AND WE COLLECT LIQUIDATED DAMAGES
SO THERE CAN BE COMPLEXITIES TO GET TO THE FINAL ANSWER ABOUT WHO OWES MONEY AND WHO IS THE ULTIMATE CAUSES OF DELAY
AND WITH THAT SAID I AGREE WITH YOU THAT WE NEED TO BE MOVING WITH URGENCY TO GET TO THE FINAL EVALUATION AND ANALYSIS OF THE SCHEDULE PIECE
SO WE WILL MAKE SURE THAT OUR STAFF IS AWARE IN OUR MANAGEMENT TEAM DOES A HIGHER LEVEL OF OVERSIGHT TO MAKE SURE THAT WE ARE WORKING THROUGH THESE PIECES IN A TIMELY WAY
AND IN ADDITION WITH THE ASSOCIATION OF GENERAL CONTRACTORS, ALSO REINFORCING WITH THEM THE IMPORTANCE OF TURNING IN TIMELY SUBMISSION FOR THEIR SCHEDULE DELAYS
BECAUSE ONE OF THE THINGS WE WANT TO DO IS MAKE SURE THAT THE RESPONSIBILITY FOR JUSTIFYING THE DELAY IS A CONTRACTOR RESPONSIBILITY, SO WE DON'T WANT TO DO THE WORK FOR THEM,
WE WANT THEM TO TURN IN THEIR PAPERWORK TO EXPLAIN WHAT HAPPENED, INSTEAD OF US HAVING TO INCUR COST OURSELVES TO DO THAT ANALYSIS OURSELVES, iNSTEAD OF HAVING THAT THAT PAPERWORK TURNED IN SO THAT WE CAN EVALUATE IT FOR JUSTIFICATION
SO, THANK YOU
THANK YOU JANICE FOR THAT
I THINK WE'VE GOT A FEW QUESTIONS CLERK HART, COULD YOU, EVERYBODY PLEASE UNMUTED YOURSELF, COMMITTEE MEMBERS AND CLERK HART WOULD YOU CALL THE ROLL
BEGINNING WITH COMMISSIONER CHO
I DON'T HAVE ANY QUESTIONS
I GUESS THIS IS WHY WE DO AUDITS SO I APPRECIATE ALL THE RECOMMENDATIONS AND LOOK FORWARD TO SEEING THE CHANGES
THANK YOU
COMMISSIONER MEMBER GIRKY
I HAVE NO FURTHER QUESTIONS THANK YOU
THANK YOU COMMISSIONER BOWMAN
OKAY I GUESS I'M THE ONLY ONE WITH THE QUESTION AND ACTUALLY I JUST WANTED TO START, IT'S MORE OF A POINT AND JANICE, YOU ACTUALLY STARTED TO COVER IT
THANK YOU SO MUCH FOR THIS, AND I JUST WANTED TO SAY THAT I WOULDN'T EVER REALLY EXPECT OUR TEAM TO EVER BE DOING SOMETHING LIKE LOOKING AT TIME CARDS FOR CONTRACTORS, OR PARKING VALIDATION TO SEE HOW LONG YOU WERE REALLY ON THE JOB SITE, SO I DON'T HAVE ANY ISSUES WITH
THAT I REALLY APPRECIATE THE POINT THAT YOU WERE MAKING ABOUT TALKING TO THE AGC
AND I THINK THAT THIS PERHAPS COULD BE I HOPE THAT WE CAN GET THE WORD OUT SO NOT JUST THE AC BUT THE GENERAL CONTRACTING COMMUNITY THAT THESE SORTS OF AUDITS WILL BE DONE
AND NOT WITH REGULARITY BUT SPROUTED ALL MEANING THAT WE VERY MUCH EXPECT THAT ALL COMPANIES ARE ABIDING BY ALL THE RULES AND PROVIDING ACCURATE INFORMATION
SO I DON'T HAVE ANY ISSUES WITH YOUR STAFF FOR THE WAY THINGS WERE HANDLED, BUT I DO THINK THAT WE REALLY SHOULD USE THIS AS A CASE IN POINT TO MAKE SURE THAT FOLKS REALLY KNOW THAT THERE ARE TIMES AND WE'RE REALLY GOING TO LOOK INTO THIS
SO THESE ARE PUBLIC FUNDS AT THE END OF THE DAY, AND IT'S CRITICALLY IMPORTANT THAT WE WE CAN GUARANTEE TO THE PUBLIC THAT THEIR MONEY IS WELL SPENT
AN OCCASIONAL OVERTIME BY A COUPLE OF HOURS IS ONE THING BUT SOMETHING WHERE IT COULD APPEAR MORE SYSTEMIC IS CERTAINLY A MUCH BIGGER ISSUE
SO THANK YOU FOR WHAT YOU'VE DONE TO HELP MOVE THIS ALONG AND TALK TO THE AGC TO BEGIN WITH AND AGAIN I HOPE WE CAN REALLY USE THIS GIVE THIS INFORMATION OUT MORE WIDELY
THAT WE ARE GLENN AND HIS TEAM WILL TAKE A LOOK AT IT
SO GOOD JOB JANICE, THANK YOU
YEAH THANK YOU JUST TO CLARIFY WE HAVE ALSO TOLD OUR CURRENT CONTRACTORS ALL OF THEM THE IMPORTANCE OF ACCURATE INFORMATION
SO I WANTED TO CLARIFY THAT IT WAS BOTH AGC AS WELL AS ALL OF THE THE CONTRACTORS THAT CURRENTLY HAVE A CONTRACT WITH US
EXCELLENT, THANK YOU
ALRIGHT MOVING ON TO STILA
GLENN, THE NEXT ITEM
SO STILA, LAST ELEMENT WE'LL DISCUSS IN PUBLIC SESSION
ESSENTIALLY STILA HAS BEEN WITH US FOR A LONG TIME COMMISSIONERS, SINCE MARCH 2011
AND THE PANDEMIC HAS BEEN HARD ON THEM AS WITH EVERYONE ELSE
THEY BENEFITED FROM SOME OF THE THINGS THAT THE PORT DID AND DEFERRAL REVENUES THROUGH THE PANDEMIC BUT NONETHELESS IT'S MATERIALLY AFFECTED THEM AND THEIR OPEATIONS
BY IN OCTOBER OF THIS YEAR THEY THAT PRETTY MUCH ABANDONED EVERYTHING AND STARTED TO CEASE OPERATIONS, AND THE CONTRACT EXPIRED
WELL THEY NOTIFIED US THAT AS OF 7 2020 THEY ARE DONE
AND THEN WE DO NOW THAT THEY'RE IN CHAPTER SEVEN BANKRUPTCY
IF YOU LOOK AT THE MAG AND THE TRIP COUNT, IS IMPORTANT TO POINT OUT THAT THEIR MAG IS ABOUT 732,000 DOLLARS A YEAR AND THE ADDITIONAL TRIP FEES THAT YOU SEE THERE
ANYTIME THEY GO OVER 38,000 TRIPS, THEY HAVE TO PAY US FOUR DOLLARS PER TRIP
SO IT CAN BE SIGHTFUL, BUT AS I'LL SHOW YOU THE NEXT ISSUE, ON THE ISSUE, IS HOW DO YOU KNOW THAT HOW MANY TRIPS THEY HAVE
YOU A SELF REPORTED AND THAT'S WHERE WE HAVE SOME RISKS
SO NEXT SLIDE PLEASE
MICHELLE? SO ONE OF THE THINGS WE DO IN AUDIT IS WE LOOK AT ALL THE SOURCES OF INFORMATION THAT WE HAVE
WE LOOK AT THE {INDISCERNABLE} GO TO STILA, SAY OKAY NOW SHOW US YOUR RECORDS
SHOW US HOW MANY TRIPS YOU HAVE
AND THEN WE'LL LOOK AT THE PORT SYSTEMS AS WELL
STILA WAS WHEN WE STARTED THIS AUDIT THEY WERE IN THE PROCESS OF SHUTTING DOWN, AND THEY REALLY DIDN'T HAVE A LOT OF BUSINESS
THE PRESIDENT OF STILA TOLD US HE HAS NO RECORDS AND HE SAID I WOULDN'T EVEN KNOW WHERE TO GET THEM FROM
THE CONTRACT REQUIRES THEM TO MAINTAIN DOCUMENTATION RECORDS
SO THEY HAD NONE AND SO THEY WEREN'T ABLE TO PROVIDE US WITH ANYTHING THAT SHOWED US HOW MANY TRIPS THEY HAD
AND ABOUT THAT 38,000 THRESHOLD
NOW WHEN THEY GO OVER 38,000 TRIPS, THEY HAVE TWO NON REVENUE TRIPS THEY, HAVE THEY THEYREL CALLED CALL-IN LIMOS, OR WHEN THEY CALL IN A CUSTOMER CALLS IN FOR A SPECIFIC TYPE OF TRIP, AND THEN THEY HAVE REGULAR LIMO TRIPS OR SOMETHING GOES UP
NOW ON THE REGULAR LIMO TRIPS WHERE THEY PAY US THE FOUR DOLLARS PER MONTH, ACTUALLY FOR ALL OF THEIR TRIPS IT'S AN AVI SYSTEM THAT TRACKS EVERY SINGLE TRIP AND THAT'S OUR INTERNAL SYSTEM
SO OUR INTERNAL SYSTEM BECAUSE OF THE WEIGHT SETUP, ISN'T ABLE TO DIFFERENTIATE BETWEEN THE NON REVENUE TRIPS AND THE REVENUE TRIPS
SO WE CLEARLY HAVE AN OPPORTUNITY THERE TO BUILD OUR IN-HOUSE SYSTEMS TO ENHANCE THEM SO WE CAN ACTUALLY TRACK THOSE AND HAVE ONE SOURCE OF INFORMATION WE CAN USE ACCURATELY TO VERIFY THE THREATS TO THE STILA, OR ANY VENDOR IN THIS CASE SHOULD HAVE RECORDS SO WE CAN TIE THOSE THAT MAKE SURE THAT WHAT THEY'RE PAYING US IS TRULY WHAT THEY OWE US
SO IN THIS CASE, STILA DIDN'T HAVE THE RECORDS, AND OUR SYSTEMS DON'T BREAK OUT THE DETAIL BETWEEN THEIR REVENUE TRIPS AND THE NON REVENUE TRIP
YEAH WE HAVE AN ISSUE THERE
AND WELL IF WE CAN'T COMMISSIONERS, COLLECT MONEY IN THIS BECAUSE AS PRETTY MUCH DONE WITH
YEAH, IT'S LEARNING THAT WE CAN APPLY TO THE FUTURE
NEXT SLIDE PLEASE MICHELLE
SO I THINK WHAT WE'RE SUGGESTING HERE ON THE FIRST ISSUES WHILST THIS IS DONE
IN THE FUTURE THERE'S MAYBE ON THE AVI SYSTEM, WE NEED TO FIGURE OUT SUPPORT
HOW WE CAN ENHANCE THE AVI SYSTEM, AND RECONCILE IT, SO THAT WHEN WE HAVE SITUATIONS LIKE THIS WITH PREARRANGED LIMITS THAT AREN'T BILLED FOUR DOLLAR CHARGE, BUT THE REGULAR LIMO FEES ARE BILLED FOUR DOLLARS
WHEN YOU EXCEED THAT 38,000, HOW CAN WE DIFFERENTIATE THAT IN- HOUSE, PERHAPS MULTIPLE AVI CARDS OR RETUNING THE AVI SYSTEM OR DO SOMETHING THERE
BECAUSE THE HONOR SYSTEM WHERE THEY JUST PAY US AND BECOMES HARD TO MANAGE, AND WHEN THEY GO FILE BANKRUPTCY AS THEY DID IN THIS CASE, AND DON'T HAVE RECORDS, IT BECOMES EVEN HARDER TO PROVE OUT
NOW IN A NORMAL YEAR WE WANT TO BE ABLE TO CLEARLY RECONCILE ALL OF THIS
SO THAT'S THE FIRST ISSUE THAT WE HAVE IS, BASICALLY IN A NUT SHALL NOT, STILA NOT HAVING THE RECORDS AND SELF REPORTING WHAT THEY OWE US TO US
THE NEXT ISSUE, NEXT SLIDE PLEASE
MICHELLE? ONE MORE SLIDE
WAS DO BECAUSE STILA FILED FOR, BANKRUPTCY THEY OWE US FEES FOR SEVERAL MONTHS
AND FOR THOSE FEES THAT THEY OWE US, THEY'RE UNABLE TO PAY, BUT WE HAVE SOMETHING CALLED SURETY ON HAND, AND WE CAN MAKE OURSELVES HOLD THROUGH THAT SURETY
SO IT'S JUST A RECOMMENDATION TO THE PORT THAT WE CAN BE KEPT HOLD OF THE SURETY, BUT WE NEED TO GO THROUGH LEGAL MEANS WORK WITH LEGAL AND COLLECT THAT SURETY
THERE'LL BE A DIFFERENCE THAT WILL BE REFUNDED TO STILA BECAUSE THEY HAVE MORE SURETY ON HAND THAN IS OWED TO US
AND COMMISSIONERS AND MS GIRKY, ALSO ONE LAST THING I WANT TO POINT OUT IS THAT YOU KNOW THE SURETY IN HAND TURNS OUT TO BE ENOUGH BECAUSE OF THE ENVIRONMENT THAT WE'RE OPERATING UNDER
BUT THE RCW REQUIRES A YEAR REVENUE SURETY YEARS RENT
A COMMISSION CAN WAIVE THAT BUT THE COMMISSION DID WITH WHICH THE COMMISSION DID WITH R82 AND THE SURETY WAS REDUCED SIX MONTHS PER R82 OR COMMISSION POLICY
THE POLICY TO THE FOR POLICY IMPROVEMENT COMMISSION
AND THEN THE REQUIRED SURETY FOR THE CONTRACT IS EVEN LOWER THAN THE PORT POLICY, SO IT'S SOMETHING THAT WE DIRECTIONALLY NEED TO CHANGE THE PORT EITHER A MANDARI OR INCREASE THE SURETY, AND I THINK THAT'S ALREADY IN THE WORKS
BUT I JUST WANT TO POINT THAT OUT THAT WE'RE UNDER BASICALLY WE HAVE ENOUGH SURETY ON HAND AND MORE SURETY THAN IS REQUIRED BECAUSE OF PANDEMIC AND BECAUSE OF LOW VOLUMES
WE COULD COULD BE AT RISK IF VOLUMES WERE HIGHER
IN THIS CASE ALL WE'RE RECOMMENDING IS THAT WE COLLECT WHATS DUE TO US.NEXT SLIDE PLEASE
OUR RECOMMENDATIONS PRETTY STRAIGHTFORWARD
AND I'M GOING TO TURN IT OVER TO JEFF HOVETT, AND MICHELLE IF YOU COULD GO TO THE NEXT SLIDE
JEFF IF YOU'RE ON THE LINE IF YOU CAN UNMUTE AND TALK ABOUT YOUR ACTUAL PLATFORM
YEAH THANK YOU GLENN, GOOD AFTERNOON COMMISSIONERS AND MEMBER GERKY
JEFF HOVETT SENIOR MANAGER OF PORT LAND SIDE OPERATIONS
JUST WANTED TO REFLECT THAT WE APPRECIATED THE AUDITORS SUPPORT WITH THIS AUDIT AS THEY REVIEWED STILA'S OPERATION AND WHAT REMAINED OF THEIR BUSINESS WHEN THEY STARTED
STILA, WE WERE FORTUNATE TO HAVE STILA UNDER A CONCESSION AGREEMENT AT THE AIRPORT FOR A LITTLE MORE THAN 10 YEARS
AND THEIR AGREEMENT FOR THE CONCESSION WAS FOR ON DEMAND LIMOUSINES SO WHEN GLENN TALKS ABOUT THIS DISTINCTION BETWEEN THE ON DEMAND LIMOUSINE PRODUCT AND THEN WHAT THEY WOULD CALL PREARRANGED STILA WOULD BE ELIGIBLE FOR BOTH OF THOSE
WITH THE ON DEMAND PRODUCT THEY WOULD BE IN THE GARAGE ON THE THIRD FLOOR SO A CUSTOMER COULD WALK UP AND IN A VERY SHORT PERIOD OF TIME GET A LIMOUSINE RIDE OR TOWN CAR RIDE FROM THE AIRPORT
AND IN THEIR PREARRANGED BUSINESS THEY WOULD HAVE PURCHASED PERMITS FROM THE PORT, THEY'VE BEEN ABLE TO ACCESS THE AIRPORT FOR PREARRANGED RIDES AND ANOTHER BUSINESS
NOT UNUSUAL AND UNCOMMON WITH OUR AIRPORT OR ANY OTHER AIRPORT AROUND THE COUNTRY
SO IN REVIEWING THE RECOMMENDATIONS FROM THE AUDITORS WE COMPLETELY AGREE THERE'S AVI OR AUTOMATED VEHICLE IDENTIFICATION SYSTEM IS A REALLY GOOD PROGRAM THAT IS WIDELY USED IN AIRPORTS AROUND NORTH AMERICA
AND RECORDS VEHICLE ACTIVITY SO VEHICLE ACTIVITY ON THE DRIVES WHICH WOULD ALSO
GLENN RECOMMENDED, wOULD ALSO PICK UP ACTIVITY FOR THEIR PRE ARRANGED RIDES SO OUR TEAM AND GROUND TRANSPORTATION WOULD TRADITIONALLY REVIEW ACTIVITY THAT STILA WOULD GIVE US FOR SELF REPORTED
LOOK FOR ANOMALIES, AND FINDING A FEW WE VISIT WITH THEM AND THEN MOVE ON FROM THEM COLLECT REVENUES FROM THEM
AS GLEN INDICATED, UNFORTUNATELY THEY ARE NO LONGER IN BUSINESS
SO WE'LL TAKE THE RECOMMENDATION TO REFINE OUR PROCESS FOR VEHICLE ACTIVITY AND RECONCILIATION
IF WE DO DECIDE TO HAVE ANOTHER CONCESSION FOR LIMOUSINE PROGRAMS AT THE AIRPORT
FRANKLY SEATAC WAS ONE OF THE FEW AIRPORTS LEFT THAT DID HAVE AN ON DEMAND LIMOUSINE PRODUCT
MOST AIRPORTS HAVE GONE AWAY FROM THAT THROUGHOUT THE YEARS JUST BECAUSE OF LACK OF INTEREST AND COMPETITION FROM OTHER MODES OF TRANSPORTATION
THANK YOU GLENN
COMMISSIONER AND ON THE SECOND ISSUE JEFF, ON THE SURETY, ESSENTIALLY YOU GUYS ARE GOING TO BE COLLECTING THAT SO NOTHING
YEAH, AND ON THAT THANK YOU GLENN FOR THE PROMPT AS MUCH AS WE CAN LEGALLY PURSUE, OUR LEGAL INVOLVED WITH THAT AND AS A PRODUCT OF THE BANKRUPTCY WE'LL DO WHAT WE CAN TO COLLECT THROUGH THE SURETY THAT WE HAVE IN PLACE
COMMISSIONERS, ITS ALL YOUR QUESTIONS
EXCELLENT, IF COMMUNITY MEMBERS COULD INMUTED THEMSELVES
AND CLERK HART PLEASE CALL THE ROLL FOR QUESTIONS
THANK YOU, BEGINNING WITH COMMISSIONER CHO
NO QUESTIONS AT THE TIME THANKS
THANK YOU COMMISSIONER
MEMBER GIRKY
NO QUESTIONS THANK YOU
THANK YOU
COMMISSIONER BOWMAN
ALRIGHT I GUESS I'M THE BAD GUY TODAY
SO I HAVE A COUPLE OF QUESTIONS AND JEFF MAYBE YOU CAN HELP ME WHAT I WAS HOPING THAT WE COULD FOCUS ON IN THE MANAGEMENT RESPONSE, WAS PERHAPS YOU COULD TALK IN A LITTLE BIT MORE DETAIL ABOUT THE RECORD KEEPING
WAS THAT A REQUIREMENT OF THE LEASE? THE CONCESSION AGREEMENT? YEAH REQUIREMENT OF THE CONCESSION AGREEMENT SO, THEY WOULD REMIT ACTIVITY TO US MONTHLY
AND WE WOULD REVIEW THAT AGAINST THEIR AVI ACTIVITIES
OUR GROUND TRANSFER TEAM TRANSPORTATION TEAM TO LOOK AT AVI ACTIVITY
AND THIS IS WHERE THE AUDITORS RIGHTFULLY, SO INDICATED THAT THERE ARE SOME GAPS IN AVI AND THAT THE TRIPS MAY BE OVER REPORTED PERHAPS BECAUSE THEY MAY SHOW ACTIVITY BECAUSE THE SAME VEHICLES ARE USED IN ANOTHER PRODUCT
BUT THIS VENDOR THERE WAS A PRODUCT FOR ON DEMAND AND A PRODUCT FOR PREARRANGE EACH OF WHICH WOULD RECORD A TRIP
AND IF WE LOOK AT THE ACTIVITY THAT WE HAD MOST RECENTLY, STILA DID NOT REACH A THRESHOLD OF THEIR 38,000 TO EXCEED THE MAG, BUT THEY HAD VERY FEW TRIPS
JUST OVER A THOUSAND TRIPS FOR ON DEMAND ACTIVITY WITH MORE TRIPS THOUGH FOR PRE ARRANGED DIFFERENT PROGRAMS DIFFERENT PROCESSES FOR THEM
OKAY MY QUESTION WAS ACTUALLY THOUGH ABOUT THE RECORD KEEPING WAS THAT PART OF THE CONCESSION AGREEMENT? IT WAS
OKAY AND SO WHEN GLENN INTRODUCED THIS ITEM AND HE SAID THAT WHEN HE WAS PERFORMING THE AUDIT AND TALK TO STILA, AND THEY SAID WE DON'T HAVE ANY RECORDS I GUESS I'M TRYING TO DRILL DOWN ON THAT
SURE THAT WOULD BE PART OF WHAT THE AUDIT WOULD REVEAL IF THEY NEED TO PRESENT THOSE RECORDS
THEY'RE REQUIRED TO REPORT ACTIVITY TO THE PORT AND THEN MAKE THEMSELVES AVAILABLE FOR AUDIT WITH OTHER RECORDS
RIGHT AND SO I'M TRYING TO GET TO THE POINT OF IT WAS PART OF THE LEASE AGREEMENT CONCESSION AGREEMENT THAT THEY HAD TO KEEP RECORDS, THEY ADMITTED THAT THEY HADN'T HADN'T BEEN KEEPING RECORDS, AND SO I'M CURIOUS AS TO FROM A MANAGEMENT RESPONSE, WHAT ASSURANCES DO WE HAVE MOVING FORWARD, WHAT IS THE PLAN FOR MAKING SURE THAT THOSE CONCESSION AGREEMENTS THAT WE HAVE THAT REQUIRE RECORD KEEPING BY THE CONCESSION AREA THAT WE ARE ACTUALLY CHECKING TO MAKE SURE THAT THEY HAVE THOSE RECORDS
SURE AND THE REASON I'M SURE YOU REALIZE THAT I'M BRINGING THIS UP, OUR COMMITTEE MEMBER GERKY WOULD REMEMBER AN ISSUE WITH YELLOW CAB, FROM ABOUT SEVEN YEARS AGO WHEN I FIRST JOINED THE COMMISSION OBVIOUSLY COMMISSIONER CHO WAS NOT THERE AT THE TIME BUT, VERY VERY SIMILAR ISSUE
AND SO I GUESS THAT'S MY GREATER CONCERN IS THAT WE HAVE CONCESSION AGREEMENTS AND THEY HAVE REQUIREMENTS AND MY UNDERSTANDING IS THAT GROUND TRANSPORTATION IS DOING THEIR OWN INTERNAL CHECKING OF THAT
AND IF THAT'S NOT HAPPENING WHAT CAN WE DO TO RESOLVE THAT
SURE AND THANK YOU FOR REFRAMING THE QUESTION
SO I THINK THAT WE KNOW ENOUGH NOW, LESSONS LEARNED WITH YELLOW AND THEN AS WE LEARN TO BE MORE DILIGENT WHAT WE CAN DO AUDITING EFFECTIVELY AN INTERNAL AUDIT WITHOUT THE BENEFIT OF GLENN AND HIS TEAM, RELATED TO CONTRACT COMPLIANCE WE WOULD BE MORE DILIGENT BETWEEN MY GROUP AND OPERATIONS AND OTHERS THAT COULD LOOK AT THESE AGREEMENTS
IN ESSENCE FOR STILA THEY NEEDED TO HAVE THOSE DOCUMENTS AVAILABLE
THERE WAS A REQUIREMENT FOR US TO REVIEW THEM BECAUSE WE WERE GETTING THE MONTHLY REPORTS FROM THEM FOR TRIP ACTIVITY BUT I THINK YOU'RE ABSOLUTELY RIGHT COMMISSIONER, THAT WE WE WANT TO BE MORE DILIGENT TO KNOW THAT THOSE DOCUMENTS THAT THEY'RE REQUIRED TO HAVE ARE AVAILABLE
AT LEAST ON A MONTHLY BASIS SOME HAVE SUGGESTED EVEN DAILY TO KNOW WHAT TRIP ACTIVITY THAT THEY'RE PERFORMING
RIGHT AND SO I THINK IT'S SIMILAR TO THE ISSUE THAT WE JUST DISCUSSED WITH JANICE OGG
THE FACT THAT WE DON'T WANT TO GET TO A POINT OF HAVING TO DO AN INTERNAL AUDIT AND THEN DISCOVERING AFTER THE FACT THAT RECORDS WEREN'T KEPT, AND THAT WE WEREN'T AWARE OF THAT
SO I GUESS WHAT I WOULD BE LOOKING FOR I'VE ALREADY TALKED TO EXECUTIVE DIRECT METRUCK ABOUT THIS
A REAL PLAN FOR HOW WE'RE GOING TO RESOLVE THIS, SO THAT WE CAN HAVE CONFIDENCE ON THE COMMISSION THAT WE WON'T HAVE THIS PROBLEM AGAIN AND THE ONLY REASON WHY I'M FEELING SUCH ANXIETY ABOUT IT IS IF IN GROUND TRANSPORTATION WE HAD A VERY BIG ISSUE WITH YELLOW CAB AND THIS SEEMS TO BE VERY SIMILAR TO WHAT HAPPENED WITH THEM
AND SO WITHIN FIVE OR 6 YEARS WE'VE HAD THE SAME ISSUE WITH THE AVI AND NOT BEING ABLE TO RECORD
NUMBER ONE, ALLOWING THIS SELF REPORTING THAT SEEMS LIKE, I WOULD ASK THE TEAM TO THINK ABOUT HOW WE MOVE TO A DIFFERENT SYSTEM THAT'S MORE RELIABLE, AND IF WE HAVE PROBLEMS WITH THE AVI SYSTEM TO IDENTIFY WHAT TO BE DONE TO CORRECT THOSE
SO I HOPE THAT WE CAN COME UP WITH A REAL MANAGEMENT, A MORE PROACTIVE AND TIMELY MANAGEMENT RESPONSE THAT CAN GIVE SOME ASSURANCES TO THE PUBLIC THAT WE'RE GOING TO BE CHANGING, RATHER IN ADDITION TO WE'LL DO BETTER THE NEXT TIME
I REALLY APPRECIATE THAT VERY MUCH, BUT I DO THINK THIS IS A BIG RISK FOR US
THIS IS THE SECOND TIME THAT THIS HAS HAPPENED
AND SO I THINK WE JUST NEED MORE ASSURANCES ABOUT HOW WE'LL REMEDY IT
THANK YOU COMMISSIONER
THANK YOU
ALRIGHT I GUESS IF WE HAVE NO OTHER QUESTIONS GLENN ANYTHING ELSE TO BRING UP? THAT IS IT FOR AUDITS TODAY WE'VE GOT A NON PUBLIC SESSION COMING UP
SO APPENDIX A IS JUST LISTING OF ALL THE OUTSTANDING ISSUES
NOTHING FOR THE PUBLIC TO KNOW BUT THERE'S NOTHING LEFT FOR THIS PUBLIC SESSION
OKAY THANK YOU VERY MUCH
ALRIGHT WITH THAT I'M GOING TO GO DOWN TO MY SCRIPTURE
I BELIEVE THAT WE ARE GOING TO I THINK WE CAN TAKE A SHORT BREAK MICHELLE WOULD THAT BE ALL RIGHT AND WE'RE GOING TO GO INTO THE NON PUBLIC SESSION AT 4:30 YES WE CAN TAKE A BREAK FOR CERTAIN IF THE COMMITTEE JUST WANTS TO HOLD OFF UNTIL 4 30 YOU CAN ALSO START EARLIER IF YOU LIKE BUT I'M HEARING MAYBE WE'LL START AT 4:30
AS WELL I JUST NEED YOU TO NOTE COMMISSIONER THAT WE ARE RECESSING INTO THE NON PUBLIC PART AND THAT YOU WILL ADJOURN THEN WHEN THAT NON PUBLIC SESSION IS OVER
ALRIGHT WELL I'LL ASK MY FELLOW COMMITTEE MEMBERS WOULD YOU PREFER JUST A 10 MINUTE BREAK OR WAIT TILL 4 30 WHICH WOULD BE IN ABOUT 25 MINUTES
COMMISSION I'M GOING TO START EARLY
ALRIGHT
I AGREE
OKAY SO LET'S JUST DO A 10 MINUTE BREAK AND START AT 415
OKAY SO THIS CONCLUDES TODAY'S PUBLIC AGENDA FOR THE PORT OF SEATTLE AUDIT COMMITTEE
WE'RE GOING TO REACH US INTO THE NON PUBLIC PORTION OF THE MEETING TO ADDRESS ITEM NUMBER EIGHT, WHICH IS AN INFORMATION TECHNOLOGY AUDIT ITEM FOR MALWARE DEFENSES EXCUSE ME FOR THE AVIATION MAINTENANCE
I'M GOING TO ASK JUST ONE MORE TIME FOR ANY CLOSING COMMENTS FROM THE MEMBERS BEFORE WE RECESS
COMMISSIONER CHO ANY CLOSING COMMENTS NO I JUST WANT TO SAY THANK YOU ALL FOR THE GREAT WORK ON ALL THE AUDITS
THANK YOU COMMISSIONER
MEMBER GIRKY FOR CLOSING COMMENTS
I WOULD JUST ECHO THAT I THOUGHT THAT THERE WAS SOME GREAT FINDING THINGS AUDITS THAT WERE DISCUSSED TODAY AND I APPRECIATE EVERYTHING
EXCELLENT
THANK YOU I DO AS WELL AND WE'LL SEE YOU ALL BACK IN ABOUT NINE MINUTES THEN
JUST A NOTE BEFORE WE ALL TURN OFF THIS CALL THAT IT IS A SEPARATE TEAM LINK FOR THAT NON PUBLIC SESSION SO PLEASE GO AHEAD AND DROP OFF OF THIS LINK AND JOIN THAT LINK IF YOU ARE TO BE IN THE NON PUBLIC SESSION YOU WOULD HAVE RECEIVED THAT MEETING INVITATION
EXCELLENT THANK YOU FOR THAT REMINDER MICHELLE
ALRIGHT WE'LL SEE YOU IN A FEW MINUTES
THANK YOU.

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PDF files are created with text and images are placed at an exact position on a page of a fixed size.

Web pages are fluid in nature, and the exact positioning of PDF text creates presentation problems.

PDFs that are full page graphics, or scanned pages are generally unable to be made accessible, In these cases, viewing whatever plain text could be extracted is the only alternative.