The Audit meeting scheduled for 2021-12-09 at Remote

Transcript

The Audit meeting scheduled for 2021-12-09 at Remote

THIS IS COMMISSIONERS STEPHEN BOWMAN CALLING TO ORDER THE PORT OF SEATTLE AUDIT COMMITTEE SPECIAL MEETING TODAY IS THURSDAY, DECEMBER 9, 2021, AND THE TIME IS 2:42
OUR APOLOGIES FOR STARTING THE MEETING LATE
WE ARE MEETING REMOTELY TODAY VIA TEAM PLATFORM TO COMPLY WITH SENATE CONCURRENT RESOLUTION 8402 AND GOVERNOR INSLEE'S PROCLAMATION 2028
PRESENT WITH ME TODAY IS COMMITTEE MEMBER SAM CHO AND PUBLIC MEMBER CHRIS GEHRKE
WILL THE CLERK PLEASE CALL THE ROLL TO ENSURE ALL COMMITTEE MEMBERS ARE ON THE LINE? THANK YOU
BEGINNING WITH COMMISSIONER BOWMAN PRESENT
THANK YOU
COMMISSIONER CHO PRESENT
THANK YOU
MEMBER GHERKE PRESENT
THANK YOU
YOU DO HAVE A QUANTUM
EXCELLENT
THANK YOU
THIS IS A VIRTUAL MEETING
WE'VE MADE SPECIAL ARRANGEMENTS TO PROVIDE FOR REMOTE PARTICIPATION FOR ALL OF OUR STAFF, ANY OUTSIDE PRESENTERS AND OUR COMMITTEE MEMBERS
ALSO, PLEASE NOTE THAT ALL THOSE COMMENTS AND QUESTIONS TODAY WILL BE TAKEN BY WILL CALL METHOD AS A RESULT, FOR A VIRTUAL ENVIRONMENT TO MAKE THIS MEETING MORE ACCESSIBLE TO THE PUBLIC
THE MEETING IS BEING LIVE STREAMED AND DIGITALLY RECORDED AND MAY BE VIEWED OR HEARD AT ANY TIME ON THE PORT PORTS WEBSITE
OUR FIRST ITEM OF BUSINESS TODAY IS APPROVAL OF OUR LAST MEETING
MINUTES FROM SEPTEMBER 9, 2021
ARE THERE ANY CORRECTIONS TO THE MINUTE? ALL RIGHT
SHARING NOTHING
IS THERE A MOTION AND A SECOND TO APPROVE THE MINUTE SO MOVED
EXCELLENT
AND I WILL SECOND
SO THE MOTION IS MADE
AND SECOND COMMITTEE MEMBERS, A QUESTION BEFORE US IS APPROVAL OF THE MINUTES
PLEASE SAY YES OR NO WHEN YOUR NAME IS CALLED COMMISSIONER CHO
AYE
SORRY, MR BOBBIN
THANK YOU
ALL RIGHT
THANK YOU
YOU DO HAVE TWO YESES FOR THIS ITEM
EXCELLENT
THE MINUTES ARE APPROVED AS PRESENTED
WE ARE GOING TO BE MOVING INTO OUR NEXT ORDER OF BUSINESS, WHICH IS EXTERNAL AUDIT PRESENTERS, PLEASE UNMUTE YOURSELVES
COMMITTEE MEMBERS
YOU MAY USE THE HAND RAISING TOOL TO INDICATE THAT YOU WISH TO SPEAK OR ELSE I'LL CALL FOR QUESTIONS AT THE CONCLUSION OF THE PRESENTATION
MR FERNANDEZ, WOULD YOU PLEASE INTRODUCE OUR FIRST SPEAKERS AND THE TOPIC? YEAH, COMMISSIONERS
SO TODAY WE HAVE OLGA DARLINGTON AND ANNA WALPRINT FROM MOSS ADAMS, AND THEY'LL BE PRESENTING OUR 2021 AUDIT SERVICES PLAN AS THEY KICK OFF THE AUDIT
SO, OLGA AND ANNA, I'LL PASS IT TO YOU, MICHELLE, IF YOU CAN PULL UP THAT PRESENTATION
THANK YOU, GLENN
THANK YOU
GOOD AFTERNOON
MEMBERS OF THE AUDIT COMMITTEE
IT'S GREAT TO BE WITH YOU HERE AGAIN TODAY AS WE ARE PROVIDING THE HIGHLIGHTS OF OUR AUDIT PLAN OF 2021
YEAR END AUDIT
OF COURSE, AS ALWAYS, THE START OF THE AUDIT IS BEFORE DECEMBER 31, YEAR END OF THE PORT COURT
AND THAT'S INTENTIONAL TO MAKE SURE THAT WE PLAN THE AUDIT IN ADVANCE OF THE YEAR END AS WELL AS REVIEW SOME INTERNAL CONTROLS AND PROVIDING YOUR RECOMMENDATIONS TO MANAGEMENT ON ANYTHING WE SEE BEFORE THE YEAR END DISCLOSE
AND SO THE MANAGEMENT CAN ADDRESS ANY OF THOSE QUESTIONS
IF WE CAN ADVANCE TO THE NEXT SLIDE, THERE IS A BRIEF AGENDA
WHAT WE'LL COVER TODAY IS WE'LL PRESENT OUR SERVICE TEAM MEMBERS
WE'LL FOCUS ON THE SCOPE OF SERVICES THAT WE WILL BE PROVIDING FOR THE PORT
AS PART OF OUR 2021 ENGAGEMENT, WE'LL REVIEW RESPONSIBILITIES OF AUDITOR AS WELL AS MANAGEMENT
TALK A LITTLE BIT ABOUT THE AUDIT PROCESS, AUDIT RISKS, AS WELL AS THE CONSIDERATION OF FRAUD AND AUDIT PROCESS, AND THEN COVER THE TIMELINE FOR OUR 2021 ENGAGEMENT
ON THE NEXT SLIDE, WE DO HAVE A SUMMARY OF THE LEADERSHIP OF OUR AUDIT TEAM
OF COURSE, OUR TEAM IS MUCH LARGER THAN THAT, AND MANY MEMBERS OF OUR TEAM DO TURN OVER, SO THERE'S USUALLY SOME NEW FACES, NEW NAMES AS PART OF OUR AUDIT TEAM
BUT THE TEAM LEADERSHIP HAS REMAINED CONSISTENT IN THE CURRENT TEAM FOR THE LAST TWO OR THREE YEARS TO MAKE SURE THAT WE HAVE THE CONSISTENCY AND KNOWLEDGE OF THE PORT OPERATIONS
WE DID INCLUDE SOME CONTACT INFORMATION HERE FOR ALL OF THE TEAM MEMBERS ON THIS SLIDE
SHOULD YOU HAVE ANY QUESTIONS AFTER THIS PRESENTATION BETWEEN NOW AND THE TIME THAT WE FINISH THE AUDIT, WHICH WILL BE IN APRIL, FEEL FREE TO REACH OUT TO ANYONE ON THE TEAM
AND OF COURSE, THE MAIN REASON FOR OUR PRESENTATION TODAY IS NOT ONLY TO INFORM YOU ABOUT THE AUDIT PLAN THAT WE'RE SETTING OUT, BUT KEEP THAT TWO WAY COMMUNICATION BETWEEN THE AUDIT COMMITTEE AND THE AUDITOR
SHOULD YOU HAVE ONCE AGAIN ANY QUESTIONS OR ANY CONCERNS SPECIFICALLY TO ADDRESS IN THE AUDIT ON THE NEXT SLIDE, A QUICK SUMMARY OF OUR AUDIT SCOPE OF OUR PROCEDURES
OF COURSE, WE WILL BE PERFORMING THE AUDIT OF THE FINANCIAL STATEMENTS OF THE PORT OF SEATTLE, WHICH INCLUDES ITS ENTERPRISE FUND AS WELL AS A FIDUCIARY FUND, WHICH IS COMPRISED OF THE WAREHOUSE PENSION TRUST FUND
THOSE DOCUMENTS WILL BE INCLUDED, OR THOSE TWO REPORTS WILL BE INCLUDED AS PART OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE QUOTE
AS WE ARE PERFORMING THE AUDIT IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS, WE WILL BE ONCE AGAIN TESTING THE INTERNAL CONTROLS SURROUNDING THE MAJOR BUSINESS CYCLES, AND WE WILL BE REQUIRED TO PROVIDE A REPORT OR ISSUE REPORT ON THOSE INTERNAL CONTROLS SURROUNDING THE FINANCIAL REPORTING
WE WILL BE PERFORMING A SINGLE AUDIT AS WELL, WHICH IS A COMPLIANCE AUDIT ON FEDERAL EXPENDITURES OR EXPENDITURES OF ANY GRANTS THAT HAVE BEEN PROVIDED FROM FEDERAL SOURCES
AIP PROGRAM HAS BEEN THE MAJOR PROGRAM FOR THE PORT THAT WE HAVE AUDITED IN THE PAST YEARS, AND WE EXPECT THAT TO CONTINUE THIS YEAR AS WELL, PARTICULARLY AS NEW METHODS OF FUNDING THAT ARE ALLOCATIONS FROM CONGRESS IN THE FORMS OF CARE ACT FUNDS
KRISTA AND ARPA ARE COMING THROUGH THAT PROGRAM AS WELL
ANOTHER COMPLIANCE AUDIT WILL BE A PASSENGER FACILITY CHARGE PROGRAM AUDIT SPECIFIC TO RECEIPTS AND EXPENDITURES FOR THE PFC PROGRAM
WE WILL ALSO BE PROVIDING A REPORT ON THE SCHEDULE OF NET REVENUES AVAILABLE FOR DEATH SERVICE AND TWO SEPARATE AGREED UPON PROCEDURES ENGAGEMENT ONE FOR THE DEPARTMENT OF ECOLOGY AND ONE FOR THE ENVIRONMENTAL PROTECTION AGENCY
SO QUITE A FEW DIFFERENT THINGS GOING ON AT THE SAME TIME THERE
ON THE NEXT SLIDE, WE WILL QUICK SUMMARY OF THE AUDITOR RESPONSIBILITIES UNDER GOVERNMENT AUDITING STANDARDS
FOR OUR RESPONSIBILITY IS TO FOCUS ON AUDITING THE FINANCIAL STATEMENTS WHICH ARE RESPONSIBILITY OF MANAGEMENT
WE DO HAVE TO LOOK INTO INTERNAL CONTROLS THAT SURROUND THE FINANCIAL REPORTING AND ANY MAJOR CYCLES THAT BECOME PART OF THAT FINANCIAL REPORTING, INCLUDING THE INFORMATION TECHNOLOGY SYSTEM
WE WILL ISSUE OUR REPORT AND PROVIDE A REPORT ON THE RESULTS OF THE AUDIT TO THOSE CHARGE TO GOVERNANCE, WHICH IS THE AUDIT COMMITTEE AT THE COMPLETION OF THE AUDIT, AS WE ALWAYS DO ON THE NEXT SLIDE, A QUICK HIGHLIGHT ON THE RISKS INVOLVED IN THE AUDIT AND A CONSIDERATION OF FRAUD IN THE FINANCIAL STATEMENT AUDIT IS PROBABLY THE MAJOR CONSIDERATION, PARTICULARLY THIS PAST YEAR, AS THERE SEEM TO BE INCREASED RISK FOR MANY GOVERNMENT AGENCIES, PARTICULARLY FROM THE IT STANDPOINT FROM EXTERNAL SOURCES ATTACKING THE IT SYSTEMS OF THEIR GOVERNMENT AGENCIES
SO WE DO BRING OUR IT TEAM IN PARTICULAR TO LOOK AT THE STRUCTURE, SURETY AND SAFETY OF THE IT SYSTEMS OF SUPPORT
BUT AS WELL, FROM THE AUDIT STANDPOINT, WE DO PERFORM PROCEDURES AND INTRODUCE SURPRISE PROCEDURES INTO OUR AUDIT PROCESS TO MAKE SURE THAT IT DOES NOT BECOME STALE, AND THE INDIVIDUALS THAT WE WORK WITH AND FINANCE AND ACCOUNTING DON'T BECOME TOO FAMILIAR WITH WHAT WE ASKED FOR AND WHAT WE AUDIT
SO, AS I SAID, INTRODUCED AN ELEMENT OF SURPRISE AND UNPREDICTABILITY INTO OUR AUDIT PROCESS HAS BECOME A STANDARD PRACTICE
ON THE NEXT SLIDE, WE DO HAVE SOME OF THE AUDITS AREAS OF FOCUS THAT [inaudible 00:09:59] REQUIRED
THANKS, OLGA SO, IN ADDITION TO ASSESSING FOR FRAUD RISK AS PART OF OUR PLANNING PROCESS, WE DO ALSO IDENTIFY ADDITIONAL AREAS OF SIGNIFICANT RISK OF MISSTATEMENT, WHETHER THAT'S DUE TO THE MATERIAL DOLLAR VALUE OF THOSE ACCOUNTS OR THE COMPLEX NATURE OF THE ACCOUNTING IN THESE AREAS
SO THE SIGNIFICANT RISKS IDENTIFIED IN THE CURRENT YEAR AUDIT INCLUDE REVENUE RECOGNITION, CONSTRUCTION AND PROCESS AND CAPITAL ASSETS MANAGEMENT ESTIMATES AND THEN GRANT COMPLIANCE TO ADDRESS THE RISK OF APPROPRIATE REVENUE RECOGNITION
WE PLAN TO ANALYTICALLY TEST AIRPORT AND REAL ESTATE REVENUE JUST BASED ON CURRENT AND PRIOR YEAR INFORMATION OF REVENUE BENCHMARKS SUCH AS SQUARE FOOTAGE, NUMBER OF PASSENGERS, NUMBER OF PLANES AND LANDING AND DOCK OCCUPANCY
WE'LL ALSO ANALYZE SIGNIFICANT LEASING TRANSACTIONS AND PERFORM TESTS OF INTERNAL CONTROLS SURROUNDING THE LEASE REVENUE DETERMINATION AND THE RECOGNITION PROCESS, AND THEN FOR CONSTRUCTION AND PROCESS, WE'LL PERFORM A TEST OF THE CAPITALIZED COST TO DETERMINE THAT THE CHARGES FOR THE YEAR ARE REASONABLE FOR THE WORK PROJECT THAT THEY'RE ASSIGNED TO AND MEET THE CRITERIA AND MEET THE CRITERIA FOR CAPITALIZATION
AND WE ALSO WILL EVALUATE ANY NEWLY NEWLY ESTABLISHED PROCESS BY MANAGEMENT IN THE CURRENT YEAR, WHICH IS TO EVALUATE OPEN WORK ORDERS FOR TIMELY CLOSING AND THAT TRANSFERS ARE IN THE PROPER CATEGORIES OF CAPITAL ASSETS FOR DEPRECIATION IF WE COULD GO TO THE NEXT SLIDE, PLEASE, MANAGEMENT ESTIMATES IMPACT A NUMBER OF LINE ITEMS IN THE PORT PORTS FINANCIAL STATEMENTS
WE'LL ANALYZE MANAGEMENT'S ASSUMPTIONS AND ESTABLISHING ALLOWANCES FOR UNCLASSABLE ACCOUNTS, DEPRECIATION AND DEPRECIABLE LIVES OF CAPITAL ASSETS, THE ENVIRONMENTAL AND LEGAL RESERVES, AS WELL AS THE ACTUARIAL ASSUMPTIONS THAT GO INTO ESTABLISHING PENSION AND OPE LIABILITIES, AND THEN FINALLY GRANT COMPLIANCE
AND AS OLGA MENTIONED, SPECIFICALLY, FERRIES ACT FUNDING RECEIVED DURING THE YEAR
SO WE'LL PERFORM COMPLIANCE TESTING OF EXPENDITURES OF FEDERAL AWARDS DURING THE YEAR FOLLOWING THE REQUIREMENTS OF THE UNIFORM GRANT GUIDANCE
AND THEN THIS YEAR WE'LL DESIGN SPECIFIC TESTS TO ENSURE THE ALLOWABILITY OF EXPENDITURES FOR GRANT AWARDS THAT CAME UNDER THE CARES ACT, KRISTA OR ARPA FEDERAL AWARDS
AND NEXT SLIDE, PLEASE
AND THEN HERE WE JUST HAVE A VERY HIGH LEVEL OUTLINE OF THE AUDIT TIMELINE
SO AS OLGA MENTIONED, WE REALLY KICK OFF OUR KIND OF PLANNING AND INTERIM PROCEDURES IN SEPTEMBER IN ORDER TO MAKE SURE THAT CONTROLS ARE OPERATING DURING THE YEAR THAT WE'RE TESTING
AND IF THERE'S ANY ISSUES IDENTIFIED, THERE'S TIME FOR PORT MANAGEMENT TO RESOLVE THOSE
AND THEN WE'LL KIND OF WRAP UP OUR IT PROCEDURES IN JANUARY AND AS WELL AS FINAL AUDIT PLANNING AND PREP, KICK OFF OUR AUDIT FIELD WORK IN MARCH, WHICH RUNS THROUGH MARCH AND APRIL WITH EXPECTED ISSUANCE OF ALL OF THE DELIVERABLES THAT OLGA OUTLINED BY THE END OF APRIL AND THEN PLAN TO CONNECT BACK WITH THE AUDIT COMMITTEE IN THE MAY OR JUNE TIME FRAME TO REPORT BACK ON OUR FINDINGS AND THE RESULTS OF THE AUDIT
JUMPING DOWN TO NEXT SLIDE
USUALLY AT THE END OF MY PRESENTATION, I PROVIDE A SUMMARY OF NEW GATSBY PRONOUNCEMENTS THAT WILL BE APPLICABLE FOR THE UPCOMING YEAR
I THINK THIS IS OUR LAST KIND OF A PUGET YEAR WHEN IT COMES TO IMPLEMENTING NEW GATSBY PRONOUNCEMENTS IN THE FINANCIAL STATEMENT AUDIT
THEY HAVE BEEN DEFERRED UNTIL NEXT YEAR, MOST OF THEM THE SIGNIFICANT ONES
SO WHAT I THOUGHT I'D COVER HERE FOR YOU IS A NEW AUDITING STANDARD THAT WE WILL BE FOLLOWING FOR DECEMBER 31 YEAR END AUDIT, AND THE PRIMARY CHANGE IN THIS PARTICULAR AUDITING STANDARD WILL BE THE FEEL AND LOOK OF THE ACTUAL AUDITOR REPORT
ALL THE INFORMATION IN THE AUDITOR REPORT WILL REMAIN THE SAME
WE WILL STILL PROVIDE AN OPINION WHETHER IT'S UNMODIFIED OR OTHERWISE
THE ORGANIZATION AND GEOGRAPHY OF THE REPORT ITSELF WILL BE A LITTLE BIT DIFFERENT
THAT IS SOMETHING I WILL ALSO HIGHLIGHT WHEN WE PRESENT THE FINAL REPORTS IN OUR EXIT CONFERENCE
THE NEW AUDITING STANDARD ALSO REQUIRES US TO LOOK AT OTHER INFORMATION THAT'S PRESENTED ALONG WITH THE FINANCIAL STATEMENTS, AND THAT'S USUALLY INFORMATION THAT'S INCLUDED IN THE ANNUAL FINANCIAL REPORT
SO ANYTHING THAT PRECEDES THE FINANCIAL STATEMENTS AND THE MANAGEMENT DISCUSSION ANALYSIS, I DO HAVE TO SAY THAT WE WILL NOT HAVE TO DO A LOT MORE ADDITIONAL WORK WITH RESPECT TO THAT
HISTORICALLY, MANAGEMENT DID PROVIDE US THE ENTIRE DOCUMENT OF THE ANNUAL REPORT WITH ALL OF ITS STATISTICAL INFORMATION AND TRANSMITTAL LETTER AND EVERYTHING ELSE
AND WE JUST READ THROUGH THAT INFORMATION, MAKE SURE IT'S CONSISTENT WITH THE INFORMATION THAT WE USE IN OUR AUDIT
MAKE SURE NOTHING INCLUDED IN THAT INFORMATION IS INCONSISTENT OR MISLEADING TO THOSE READING THE FINANCIAL REPORT
ONCE AGAIN NEW AUDITING STANDARD
THE BIGGEST IMPACT IS THE LOOK OF THE AUDITOR OPINION
THE REST OF THE PROCEDURES, I DON'T THINK WILL HAVE A SIGNIFICANT IMPACT ON WHAT WE WILL BE DOING ONE OTHER
I THINK THAT CONCLUDES MY PRESENTATION
BUT THERE WAS ONE OTHER THING THAT I WANTED TO MENTION WHEN I TALKED ABOUT OUR TEAM
I DID WANT TO STRESS THAT, AS WE HAVE DONE HISTORICALLY, KEEPING OUR COMMITMENT TO THE PORT AND THE COMMISSIONERS WITH RESPECT TO INVOLVING SMALLER BUSINESS FIRMS AS PART OF OUR TEAM, WE WILL HAVE TWO FIRMS OR REPRESENTATIVES OF TWO FIRMS ONCE AGAIN JOINING OUR TEAM AND BECOMING PART OF OUR TEAM
IT'S AVIATION CONSULTING AND BRANCH AND RETURNS
THEY WERE PART OF OUR TEAM DURING OUR INTERIM WORK IN SEPTEMBER AND OCTOBER, AND WE'LL COME BACK AND CONTINUE TO WORK WITH OUR TEAM IN MARCH AND APRIL AGAIN WITH THAT THAT CONCLUDES MY PRESENTATION
IF ANY OF THE COMMITTEE MEMBERS HAVE ANY QUESTIONS, I'M HAPPY TO ANSWER THOSE
WELL, EXCELLENT
THANK YOU SO MUCH
WE'RE GOING TO ENTER FOR THE PRESENTATION
COMMITTEE MEMBERS, PLEASE MUTE YOURSELVES FOR QUESTIONS AND COMMENTS
PRESENTERS WILL REMAIN UNMUTED AS WELL
PLEASE CALL THE ROLL
THANK YOU
BEGINNING WITH COMMISSIONER, CHO, QUESTIONS OR COMMENTS
NO REAL QUESTION
I JUST WANT TO THANK YOU ALL FOR THE GREAT WORK AND FOR KEEPING US ON THE TRACKS
I'M GLAD TO SEE IN HERE THAT WE'RE GOING TO HAVE SOME CONTINUITY GOING NEXT YEAR
SO WELCOME BACK AND LOOK FORWARD TO IT
THANKS
THANK YOU, COMMISSIONER CHO A MEMBER GHERKE
NO QUESTION
THANK YOU
THANK YOU, COMMISSIONER BOWMAN
GREAT
I DON'T HAVE ANY QUESTIONS EITHER
IT JUST SEEMS LIKE A GOOD, COMPREHENSIVE PLAN AND REALLY APPRECIATE THE WIDE VARIETY OF AREAS
AND I DID WANT TO COMMENT
I ALSO VERY MUCH APPRECIATE YOUR COMMENTS TOWARDS THE END ABOUT INCLUDING SOME SMALLER BUSINESSES IN THE WORK OF MOSS ADAMS THAT'S OBVIOUSLY VERY IMPORTANT TO THE PORT TO PROVIDE OPPORTUNITIES
AND SO IT'S GOOD TO SEE THAT YOU ALL SHARE THOSE SAME VALUES
SO I VERY MUCH APPRECIATE THAT
I THINK IT LOOKS LIKE IT'S GOING TO BE A GOOD YEAR
SO IF THERE ARE NO OTHER QUESTIONS AT THIS TIME FOR THE MOSS EVIDENCE TEAM, I THINK WE'LL MOVE ON TO THE NEXT ITEM THAT WOULD BE ITEM NUMBER FOUR ON THE AGENDA, WHICH IS AN UPDATE REGARDING THE EXTERNAL AUDIT SERVICES SELECTION FOR 2022 TO 2026 OPERATING PERIODS
PRESENTERS, WOULD YOU PLEASE UNMUTE YOURSELF? HI
CAN YOU GUYS HEAR ME? WE CAN
MS LAMB, GO AHEAD AND PROCEED, PLEASE
ALL RIGHT
SO GOOD AFTERNOON, COMMISSIONER CHO AND COMMISSIONER BOWMAN AND PUBLIC MEMBER CHRISTINA GHERKE
MY NAME IS LISA LAM
I'M THE ASSISTANT DIRECTOR OF ACCOUNTING AND FINANCIAL REPORTING
I'M HERE TODAY TO REQUEST YOUR ENDORSEMENTS, THE SELECTION OF THE EXTERNAL INDEPENDENT AUDITOR AND INFORM THE FULL COMMISSION OF THE EXTERNAL INDEPENDENT AUDITOR SELECTION THAT WE HAVE MADE AS A TEAM IN THE PORT AND PURSUANT FOR THEIR AUDIT COMMITTEE CHARTER
THIS IS KIND OF THE STEP THAT WHERE WE ADD THE TEAM SELECTED MOSS ADAM LLP BASED ON THE OPEN COMPETITIVE PROCESS AS A KIND OF RECAP
OUR CURRENT INDEPENDENT EXTERNAL AUDIT SERVICE CONTRACT IS EXPIRING IN MAY 2022 NEXT YEAR AFTER THE 2021 FINANCIAL STATEMENT AUDIT PERIOD COMPLETE AND WE KIND OF IN THERE JUST NOW
THE ENTRANCE CONFERENCE REALLY SIMILAR
THE SCOPE OF WORK OF OUR EXTERNAL ORDER SERVICES INCLUDE INDEPENDENT AUDIT OPINION FOR THE FINANCIAL STATEMENTS FOR THE ENTERPRISE FUND FOR THE PORT
ALSO THE FIDUCIARY FUND THAT IS REALLY REPRESENTING THE WAREHOUSE AND PENSION TRUST FUND AND THE NET REVENUE AVAILABLE FOR REVENUE BOND DEBT SERVICE THAT BOND COVERING CALCULATION, INCLUDING IN OUR PUBLIC OFFERING DOCUMENT
WHEN WE ISSUE BONDS
OUR OPINIONS ARE SINGLE AUDIT WHEN WE RECEIVE FEDERAL GRANT AWARDS, PASSENGER FACILITY CHARGE PROGRAM AUDIT THAT IS MANDATED BY FAA AND TWO AGREE UPON PROCEDURE REPORTS, ONE FOR WASHINGTON STATE DEPARTMENT OF ECOLOGY FOR TERMINAL 91
THE OTHER ONE IS FOR ENVIRONMENTAL PROTECTION AGENCY, EPA FOR EAST WATERWAY
IN JUNE I CAME TO THE AUDIT COMMITTEE AND PROVIDE YOU THE SOLICITATION DOCUMENTS
THERE INCORPORATE ALL THE EVALUATION CRITERIA BEING REVIEWED BY THE SAME ORDER COMMITTEE AND APPROVED
AND I ALSO PRESENTED IN JULY COMMISSION MEETING TO SEEK THE FULL COMMISSION AUTHORIZATION TO ALLOW DIRECTORS TO METRIC TO EXECUTE AN EXTERNAL INDEPENDENT ORDER SERVICE CONTRACT
ONE IS THIS COMPETITIVE PROCESS AND CURRENTLY THE STEP OF SEEKING ORDER COMMITTEE ENDORSEMENT OF OUR SELECTION AND BREATHING THE FULL COMMISSION AFTERWARDS
THEN WE CAN EXECUTE A CONTRACT THAT IS PURSUING OUR CURRENT CENTRAL HUMAN OFFICE POLICY CPO POLICY
SO BESIDES THE SOLICITATION DOCUMENTS BEING REVIEWED BY THE ORDER COMMITTEE, THIS ENTIRE PROCESS FROM DRAFTING ADVERTISING, EVALUATION AND SELECTION OF EXTERNAL INDEPENDENT AUDITOR FIRMS THIS PROCESS HAS BEEN LED BY OUR CPO OFFICER WITH THE PARTICIPATION OF INDEPENDENT INTERNAL AUDIT DEPARTMENT
WE ALSO INCLUDE WOMEN MINORITY BUSINESS ENTERPRISE DEPARTMENT REPRESENTATIVE TO INCORPORATE DIVERSITY IN CONTRACTING PROGRAMS IN THIS SOLICITATION
SO IN AUGUST THE CORPS RECEIVED FOUR NATIONAL PUBLIC ACCOUNTING FIRMS PROPOSAL
ALL FOUR PROPOSALS WERE EVALUATED AGAINST THE PREDETERMINED EVALUATION CRITERIA REVIEWED BY THE ORDER COMMITTEE IN THE SEASON DOCUMENT AND THE EVALUATION TEAM INCLUDE FOUR REPRESENTATIVES FROM VARIOUS OTHER DEPARTMENTS IN THE PORT OF SEATTLE
THEY ARE FROM THE ACCOUNTING FINANCIAL REPORTING DEPARTMENT, AVIATION FINANCE AND BUDGET DEPARTMENT, INTERNAL AUDIT DEPARTMENT AND THE WINDY DEPARTMENT AND THE ENTIRE PROCESS
AGAIN, I WANT TO EMPHASIZE WITH THE PRESENCE OF A CPO REPRESENTATIVE
SO HERE IS SOME HIGHLIGHT OF THE STRENGTH OF THE OVERALL PROPOSAL PRESENTED BY MOSS ADAM AND THE CURRENT SELECTED PROPOSAL BASED ON THE TEAM EVALUATION
SO HERE ARE SOME HIGHLIGHTS
SO MOSS ADAMS PROPOSAL THEY INCLUDE A PROPOSED ENGAGEMENT TEAMS EXPERIENCE COMPRISED OF A COMBINATION OF A PUBLIC SECTOR CLIENT THAT ARE VERY SIMILAR IN SIZE AND INDUSTRY TO THE PORT THEY HAVE COMMITTED THE EARLIEST COMPLETION DATE OF ALL DELIVERABLE
AMONG ALL THE OTHER EVALUATION THAT WE HAVE SEEN, THERE ARE 20 DAYS EARLIER THAN THE REQUIRED DEADLINE TO COMPLETE FOR OUR AGREE UPON PROCEDURE REPORT AND FIVE DAYS EARLIER THAN THE REQUIRED DEADLINE FOR ALL THE REMAINING REPORT
THEY ALSO INCLUDE A SOLID EXAMPLE FROM THE PORT CLIENT EXPERIENCE TO IDENTIFY POTENTIAL AUDIT RISK AND AUDIT APPROACHES FOR THE NEW ACCOUNTING STANDARD FOR THE FOURTH THAT'S COMING UP IN 2022
THEY ALSO INCLUDED SOLID QUALITY IMPROVEMENT PROGRAM ALONG WITH CAREFUL CONSIDERATION OF ADOPTING NEW AUDITING STANDARD PROCEDURE TO IMPROVE AUDIT EFFICIENCY AND QUALITY
EXAMPLE WAS THE NEW SSAE AUDIT STANDARD NUMBER 19 FOR THE AGREEMENT PROCEDURE PROCESS AND REVIEW
LASTLY, THEY COMMITTED 15% IN DIVERSITY IN CONTRACTING PROGRAM WITH THE INTEGRATION OF WINDY FIRMS INTO THE OVERALL ORDER ENGAGEMENT AND WORK ORDER COMMITTEE
DO YOU HAVE ANY QUESTIONS FOR ME WITH US COMING TO SEEK ENDORSEMENT OF THE SELECTION OF THE NEXT EXTERNAL INDEPENDENT AUDITOR FOR REPORT, MR BOWMAN, WOULD YOU LIKE ME TO CALL THE ROLL FOR ANY QUESTION? YES
I'M SORRY
I WAS JUST GOING TO SAY THANK YOU SO MUCH, MS LAMB, FOR THE PRESENTATION
YES, IT'S COMMITTEE MEMBERS
IF YOU COULD UNMUTE YOURSELVES AND CLERK HART, PLEASE CALL THE ROLL
THANK YOU
BEGINNING WITH COMMISSIONER CHO
NO, I JUST WANTED TO COMMENT AND THINK THE COMMITMENT TO 15% MINORITY BUSINESSES
I THINK IT'S GOOD TO HAVE CONTINUITY, BUT I ALSO THINK AND I THINK REALLY AGREES THAT IT'S GOOD TO PROVIDE OPPORTUNITIES IN SMALLER FIRMS AND MINORITY ON FIRMS TO ALSO GET THEIR FEET WET IN DOING THIS SO THAT SOMEDAY THEY CAN SOMEHOW WORK WITH LARGER PUBLIC ENTITIES ON STUFF LIKE THIS
AND SO I APPRECIATE MOST ITEMS ACCOMMODATING THAT I LOOK FORWARD TO SEEING THE COLLABORATION
BUT OTHER THAN THAT, I DON'T HAVE MUCH TO ADD
THANK YOU
THANK YOU, COMMISSIONERS MEMBER GHERKIE, I DON'T HAVE ANY ADDITIONAL QUESTIONS OR COMMENTS
THANK YOU
THANK YOU, COMMISSIONER BOWAN
NO QUESTIONS
JUST WANTED TO THANK THE TEAM FOR ALL OF YOUR WORK ON THIS
AND I KNOW THAT OVER THE YEARS, HOW MUCH TIME IT TAKES TO DO SELECTION AND PUT TOGETHER AGAIN THE AUDIT PLAN
SO I JUST WANT TO SAY HOW MUCH I APPRECIATE EVERYTHING THAT YOU'VE DONE
I'M REALLY PROUD, ACTUALLY, OF THE WORK THAT OUR AUDIT TEAM DOES EVERY YEAR
YOU GUYS DO A FANTASTIC JOB, AND IT'S VERY COMPREHENSIVE
AND I HOPE THAT THE PUBLIC HAS THE SAME AMOUNT OF TRUST IN THE WORK THAT YOU DO AND THE TRANSPARENCY THAT YOU PROVIDE
SO REALLY APPRECIATE THAT WITH THAT, IS THERE A MOTION TO APPROVE ITEM NUMBER FOUR, MR BOWMAN, BEFORE WE CALL FOR THE MOTION, I DO SEE MR KHALIFA HAS HIS HAND UP
OH, I'M SORRY
GO AHEAD, RUDY
THANK YOU FOR BEING RECOGNIZED
I APPRECIATE IT VERY MUCH
COMMISSIONERS BOWMAN AND COMMISSIONER SHOW YOU BOTH HOOKED ON THE POINT WITH REGARD TO THE PRIORITY AND THE DIRECTION THAT THE COMMISSION HAS PUT FORTH TO EXECUTIVE STAFF WITH REGARD TO WOMEN MINORITY OWNED BUSINESS PARTICIPATION IN CONTRACTING
AND THIS IS SOMETHING EXCEPTIONAL WITH REGARD TO MOSS ADAMS IN TERMS OF THEIR ENGAGEMENT AND EMBRACING THAT PRIORITY TO THEM AS WELL WITH REGARD TO THIS PARTICIPATION
AND I JUST WANT TO CLARIFY HERE, SINCE IT IS VERY IMPORTANT IN TERMS BEFORE THE SEATTLE BEING SOLD
PROGRESSIVE REGARD TO WMB PARTICIPATION
THIS IS JUST A 15% PIECE OF THE ACTION IN TERMS OF THE DOLLARS
MAZDA ADAMS HAS WORKED WITH US AND COMMITTED TO CONTINUE TO WORK WITH US WITH REGARD TO PROVIDING AN OPPORTUNITY FOR WOMEN MINORITY ON BUSINESSES TO GROW
SO THEY ARE NOT JUST GIVEN A PIER OF THE AUDIT WORK, THEY BECOME AN INTEGRAL PART OF THE MOSS ADAMS AUDIT TEAM
THEY'RE GIVEN THE MOSS ADAMS LAPTOP
THEY'RE GIVEN THE TRAINING, THE ACCESS AND EVERYTHING
SO OUR GOAL HERE AT THE PORT OF SEATTLE RESPECTING DIRECTION TO PORT COMMISSIONERS IS THAT WE WANT TO BUILD A RESUME OF WMB FIRMS SOMEDAY THEY CAN GET UP THERE AND SAY WE'RE NOT PART OF MOSA
WE ARE CAPABLE OF DOING BIGGER AUDITS
SO THIS IS REALLY FULFILLING
VERY PROACTIVELY THE DIRECTION THE PORT COMMISSION
AND I WANT TO THANK MOSS ADAMS FOR THAT COMMITMENT AND ONGOING WITH REGARD TO MOVING FORWARD AS WELL
IT'S A VERY IMPORTANT POINT TO MAKE TO THE PUBLIC WITH REGARD TO THE COMMITMENT WE ARE MAKING FOR SMALL BUSINESSES
THANK YOU, RUDY
THAT'S GREAT
THANK YOU SO MUCH FOR BRINGING THAT UP
AND I ABSOLUTELY LOVE I DON'T THINK IT'S JUST INSPIRATIONAL THAT SOME OF THESE SMALLER FIRMS WOULD ONE DAY TAKE OVER THE AUDIT
I REALLY HOPE THAT THAT HAPPENS NOTHING AGAINST MOSS ADAMS, BUT SOMETIME IN THE VERY NEAR FUTURE, I LOVE THE IDEA THAT WE'RE BEING A PART OF BUILDING CAPACITY
SO THANK YOU FOR BRINGING THAT UP
REALLY APPRECIATE IT
THANK YOU
AND THERE'S A LOT OF CREDIT TO DIVERSITY AND CONTRACTING OPERATIONS UNDER ME AND RICE
THEY PUT FORWARD A PORT GEN PROGRAM, AND WE INVITED ALL WMB FIRMS THEY'RE INTERESTED IN THE ACCOUNTING, AUDITING, FINANCE, TREASURY ARENA AND CONTRACTING
AND WE COLLECTED BUSINESS CARDS
AND WE ARE ROTATING THIS OPPORTUNITY HERE WITH REGARD TO FIRMS TO BE ABLE TO ALIGN WITH MOSS ADAMS IN THIS CONTEXT, IT IS A VERY SOLID PROGRAM THAT WE'RE EMBRACING MOVING FORWARD
THANK YOU
THAT'S GREAT TO HEAR, RUDY
I WASN'T AWARE THAT THAT WAS PART OF PORT GAN
THAT'S FANTASTIC
IT IS
THAT'S EXACTLY HOW THAT PROGRAM IS SUPPOSED TO WORK
I APPRECIATE THAT
THANK YOU
ALL RIGHT
WELL, IF THERE IS NO FURTHER DISCUSSION, I'LL GO BACK TO CALKINS FOR A MOTION TO APPROVE ITEMS NUMBER FOUR
SO MOVED
EXCELLENT
AND I WILL SECOND CLERK HART, PLEASE CALL THE ROLL FOR THE VOTE
THANK YOU
BEGINNING WITH COMMISSIONERS CHO
AYE
THANK YOU, COMMISSIONER BOWMAN
AYE
THANK YOU
YOU DO HAVE TWO YESES AND ZERO NOS FOR THIS ITEM
THANK YOU SO MUCH
ALL RIGHT
THE MOTION IS APPROVED
ALL RIGHT
WE ARE NOW AT ITEM NUMBER FIVE ON THE AGENDA
THE 2021 AUDIT PLAN UPDATE
MR FERNANDEZ, I BELIEVE THAT YOU ARE OUR PRESENTER FOR THIS ITEM
I AM, MICHELLE
IF YOU CAN PULL UP THE DECK POINT AND WE'LL GET STARTED AND I WILL TRY TO KEEP THIS MOVING AND GET IT STOPPED AT 4:00 BECAUSE WE'VE GOT A NON PUBLIC SESSION AS WELL
COMING UP AFTER THIS NEXT SLIDE, PLEASE, MICHELLE
SO, COMMISSIONERS AND MS GHERKE
THIS IS OUR 2021 AUDIT PLAN
ALL THE GREEN ESSENTIALLY SHOWS THAT WE'VE COMPLETED VIRTUALLY EVERYTHING
WE DID HAVE ONE AUDIT, THE T TWO AIRPORT PARKING GARAGE SYSTEM
WELL, IT NEVER OCCURRED BECAUSE OF COVID
IT'S MOVED TO NEXT YEAR
SO WE MOVED IT OUT TO NEXT YEAR AND WE DID PICK UP AN EXTRA AUDIT FOR THAT
WE TOOK IT OUT OF CONTINGENCY AUDITS
AND SO, IN A NUTSHELL, WE DID COMPLETE OUR TIRE PLAN
NEXT SLIDE, PLEASE, MICHELLE
IN 2021, WE ISSUED 19 REPORTS, SIX CAPITAL, SIX OPERATIONAL, FOUR CAPITAL FIVE
IT SO ON
WE IDENTIFIED SOME HIGH RISK ISSUES, TWELVE MEDIUM RISK AND SOME LOW SO NOTHING JUST OTHER THAN A FEW HIGH RISK ISSUES
IT'S BEEN A RELATIVELY LIGHT YEAR, A LOT OF IMPROVEMENT OPPORTUNITIES AND THINGS THAT WE'RE HERE TO HELP THE BUSINESS FIX
SOME OF THE THINGS WE DID DURING COVID IS AN AUDIT OF THE RENT CONFESSION DEFERRAL RECOVERY
WE LOOKED AT CHANGE ORDERS WITHIN CAPITAL PROJECTS BECAUSE THERE WERE A LOT OF COVID RELATED CHANGE ORDERS AND WE SAW SOME OPPORTUNITIES FOR IMPROVEMENT THERE
AND THEN BESIDES AUDITS, WE DO LITTLE OFFHAND PROJECTS HERE AND THERE, LIKE ONE OF CRUISE JOURNALS OF AMERICA NEEDED A RENT CREDIT
AND IN ORDER FOR THAT TO HAPPEN, THEY NEED SOMEBODY TO COME IN AND LOOK AT THEIR BOOKS AND AUDIT THEM IN ESSENCE AND SAY, YES, THEY HAVE A LOSS
WELL, IT WASN'T VERY DIFFICULT BECAUSE THEY CLEARLY HAD A LOSS LAST YEAR BECAUSE THEY DIDN'T HAVE ANY BUSINESS
BUT WE WENT AHEAD AND DID THAT FOR THAT
AND WITH CAPITAL PROJECTS, AS ALWAYS, WE HAVE A LOT OF CHANGE ORDERS, SCHEDULE DELAYS
THAT'S ALWAYS AN AREA FOR OPPORTUNITY
NEXT SLIDE
MICHELLE, WHEN WE LOOK AT OUR AUDITS, SOME HIGHLIGHTS ON WE OCCASIONALLY GET RECOVERIES FROM AUDITS
AND IN 2021 OF THE LEASE AND CONCESSION AUDITS, WE FOUND ABOUT $169,000 IN REVENUE MONEY, THOUGH, TO THE BOARD THAT WEREN'T PAID
WE SUGGESTED WE'RE COVERING THOSE ON THE CAPITAL FRONT
WE HAD SOME SMALLER ITEMS, SOME CHANGE ORDERS TO ABOUT $30,000, MOST OF THEM FROM THE CENTRAL TROUBLE AND INFRASTRUCTURE UPGRADE PROJECT, WHICH I BRIEFED ON COMMITTEE ON EARLIER IN THE YEAR
SO SMALL RIDERS, SMALL IMPROVEMENT OPTICS
BUT WE DO RECOVER SOME MONEY
NEXT SLIDE, PLEASE, MICHELLE
IMPROVABLE COST OVERRUNS WHEN WE DO HIGHLIGHT THINGS THAT COULD HAVE BEEN PREVENTED OR BETTER CONTROLS COULD HAVE ADDRESSED, WE CAPTURE THOSE AND HIGHLIGHT THEM AS WELL
AGAIN, SMALL FOR 2021, WE IDENTIFIED $29,000 CHANGE ORDER ON THE BAGGAGE SIDE
BAGGAGE OPTIMIZATION PROJECT
I KNOW IT'S A VERY LARGE PROJECT, AND THESE ARE SMALL DOLLAR AMOUNTS THAT THEY ALL HAVE
NEXT SLIDE, PLEASE, MICHELLE
SO WITH THAT COMMISSIONERS, UNLESS ANYONE HAS ANY QUESTIONS, I'M GOING TO TALK JUMP RIGHT INTO HOW WE BUILD UP OUR AUDIT PLAN FOR 2022
AND WITH THAT, I'LL START BY SAYING WE TALK TO KEY LEADERS WITHIN THE ORGANIZATION, A VARIETY OF THEM AT DIFFERENT LEVELS, PEOPLE THAT ARE CLOSE TO OPERATIONS, PEOPLE THAT OWN CRITICAL FUNCTIONS, AND WE SPEND TIME WITH THEM
WE KIND OF KICK THE TIRES TO DO A MINI RISK ASSESSMENT
SO THESE ARE SOME EXAMPLES OF THE DEPARTMENTS THAT WE TALK TO
AND THEN FROM THOSE DISCUSSIONS, WE COME UP WITH SOME OF THE KEY RISK TEAMS THAT WE SEE SEVERAL LEADERS ACROSS THE ORGANIZATION
THEY HAVE TO BE USUALLY REPETITIVE FOR US TO CAPTURE THEM OR SIGNIFICANT
AND CLEARLY EVERYONE HAD RESOURCE ISSUES, TOTALLY VACCINE MANDATES, AGING WORKFORCE, BUT WE KNOW THAT THAT CAME WITH NO SURPRISE
PAYROLL
THERE ARE SOME OPPORTUNITIES THAT PEOPLE NOTED FOR IMPROVING PEOPLE WHERE ADMINS ARE PROVING TIME AND BECOMES A LITTLE BIT DIFFICULT TO GET ACCURACY IN CERTAIN SITUATIONS BECAUSE THE ADMINS HAVE TO RELY ON THE INDIVIDUALS THAT ARE WORKING TO LET THEM KNOW HOW MANY HOURS THE PORT
THERE IS MAYBE AN OPPORTUNITY FOR IMPROVEMENT THAT WAS POINTED OUT TO US APPROVAL SYSTEMS AND DHC, WHICH WE LOOKED AT LAST YEAR, AND WE HIGHLIGHTED AS WELL
SO THESE ARE ALL THINGS THAT MADE US SAY, OKAY, PAYROLL IS PROBABLY AN OPPORTUNITY FOR IMPROVEMENT
GRANTS, GRANTS
I'M SORRY
GRANTS ARE ALWAYS SOMETHING THAT GETS FRUIT
NINE MAX ADAMS LOOKS AT THEM IN CASE OF THE FAA MIGHT COME IN AND LOOK AT THEM AS WELL
BUT WE HAD A LOT OF GRANTS AND GRANT COMPLIANCE WERE HIGHLIGHTED
CONSTRUCTION ALWAYS JUST BECAUSE OF THE AMOUNT OF MONEY WE SPEND AND GOVERNANCE, WITH NEW COMMISSIONERS COMING IN AND CHANGING PRIORITIES
AND THEN ALSO WE TALK TO COMMISSIONER CHO YOU
WE LISTEN FROM THE ONCOLOGY MEETINGS, AND WE DO TAKE INPUT FROM STEVE BANKS AND ALSO THE EXECUTIVES
NEXT SLIDE, PLEASE, MICHELLE
SO WITH THAT, WHEN WE BUILD UP OUR PLAN, WE HIGHLIGHTED SOME OPPORTUNITIES FOR AUDITS FOR NEXT YEAR PAYROLL CONTROLS, EMERGENCY PROCUREMENT VAST BY COMMISSIONER CALKINS
COMMISSIONER CHO AT THE LAST COMMITTEE MEETING, FEDERAL GRANT ADMINISTRATION, THE CARISSA AND RELIEF PROGRAM FOR THE TENANTS
AND WE GRANT A LOT THROUGH THE SOUTH KING COUNTY FUND AND OTHER PROGRAMS SO COMMUNITY SUSTAINABILITY INITIATIVES
WE WANT TO MAKE SURE THAT THE MONEY IS BEING SPENT CORRECTLY AND FOR THE INTENDED PURPOSE
SO THAT WOULD BE SOMETHING THAT WE RECOMMEND PUTTING ON THE AUDIT PLAN
AND THEN THE CONTINGENCY AUDIT CONTRACTOR COPING 19 VACCINATION COMPLIANCE WAS SOMETHING THAT DIRECTOR METRIC ASKED
IN THE EVENT THAT WE DO REQUIRE CONTRACTORS TO COMPLY
HE WANTS TO MAKE SURE THAT THEY CLEARLY ARE COMPLIANT
IT'S JUST NOT A WINK, WINK, NOD, NOD
AND THEY SAY THEY'RE VACCINATED
NEXT SLIDE, PLEASE
ON THE CAPITAL FRONT, WE LOOK AT SIX CRITERIA FOR THE LARGER PROJECTS
THE PROJECT SIZE, CHANGE ORDERS, NUMBER OF CHANGE ORDERS, THE TYPE OF CONTRACT THEN, ARE THEY BEHIND SCHEDULE? ARE THEY OVER BUDGET
ARE THERE ANY KNOWN ERRORS, ERRORS OF COMMISSIONERS, POTENTIAL CLAIMS WE LOOK AT ALL THOSE AND THEN COME UP WITH AN ITEM PLAN
A LOT OF THIS DETAIL IS AN APPENDIX A AT THE BACK OF THIS PRESENTATION FOR THE PUBLIC OR FOR ANYONE THAT WANTS TO LOOK AT ALL THE PROJECTS, HOW WE RISK RATED THEM
NEXT SLIDE MICHELLE SO FROM THAT LIST THAT'S IN THE BACK, THE PROJECTS THAT MADE IT UP TO THE TOP ARE THE IAF, WHICH WE'VE TALKED ABOUT PREVIOUSLY AUDIT COMMITTEE MEETINGS INTERIM WESTSIDE FIRE STATION BECAUSE AGAIN, IT'S BEHIND SCHEDULE AND ABOVE BUDGET, THE NORTH CENTER LINE RENOVATION EXPANSION
AND THIS IS A CLOSED OUT ON IT PRIMARILY BECAUSE OF THE SIZE
THAT AGAIN, SOMETHING THAT WAS BROUGHT UP A PREVIOUS AUDIT COMMITTEE MEETING AND THE SOUTH SATELLITE HIGH VOLTAGE AC INFRASTRUCTURE
AND THEN THE BOTTOM THREE AUDITS OPPOSED TO AIRLINE REIGNMENT C ONE BUILDING EXPANSION
MAKE SURETY LOW VOLTAGE THOSE ARE ALL REQUIRED AUDITS BECAUSE WHENEVER WE HAVE A GCCM TYPE PROJECT OR CAPITAL PROJECT, THE RCW ADVICE OF WASHINGTON REQUIRES THAT IN CERTAIN SITUATIONS, WHEN SUBCONTRACTORS ARE SELECTED BY THE GENERAL, THAT ALL OF THOSE COSTS ARE RECONCILED AND AUDITED BY AN INDEPENDENT AUDITOR
SO WE'VE ADDED THOSE TO THE PLAN AND WE WILL BE MANAGING THAT PROCESS WITH AN OUTSIDE INDEPENDENT AUDITOR THROUGH 2022
NEXT SLIDE, MICHELLE, WHICH STATES THAT ANOTHER LEG OF OUR STOOL, THE INFORMATION TECHNOLOGY AUDITS AND FOR INFORMATION TECHNOLOGY AUDITS, WE LOOK AT THE CENTER FOR INFORMATION TECHNOLOGY OR INTERNET SECURITY, ET CETERA
INTERNET SECURITY, WHICH IS CALLED CIS, AND THEY'RE A PROFESSIONAL TECH TECH THAT HAS AS OF RIGHT NOW, 18 KEY CONTROL AREAS AND 153 CONTROLS
AND THEY SAY THESE ARE FOUNDATIONAL CONTROLS
YOU DO THAT RIGHT
AND YOUR CYBER SECURITY RISK SIGNIFICANTLY DECREASED
SO ONE OF THE THINGS WE WANT TO DO IS CYCLE THROUGH THOSE IN THE NEXT FEW YEARS
WE CAN ONLY DO SO MANY A YEAR, BUT WE DO WANT TO CYCLE THROUGH ALL OF THEM AND MAKE SURE THOSE FOUNDATIONAL CONTROLS ARE ROBUST AND EXIST
AND ONCE WE CYCLE THROUGH THOSE, THEN WE'LL EXPAND TO OTHER INFORMATION TECHNOLOGY GENERAL CONTROL
RIGHT NOW
THAT'S WHERE OUR EMPHASIS IS ON THE CIS EIGHT TOP 18 CONTROL AREAS
NEXT SLIDE, MICHELLE
SO WITH THAT, WE BREAK OUT
SO THE PORT HAS ICT OR INFORMATION TECHNOLOGY DEPARTMENT CALLED ICT THAT MANAGES MANY OF THE SYSTEMS CRITICAL SYSTEMS AND THEN AVIATION MAINTENANCE MANAGERS
A LOT OF THE SYSTEMS AT THE AIRPORT AND A LOT OF THEM ARE ALSO CLOSED NETWORK SYSTEMS AT THE PORT, MEANING THEY DON'T CONNECT TO THE OUTSIDE INTERNET, BUT NONETHELESS, THEY'RE CRITICAL INFRASTRUCTURE
YOU'LL SEE TWO LINES FOR EACH OF THESE AUDITS, ONE FOR ICT, ONE FOR AVIATION MAINTENANCE
AND THESE ARE THE CIS AUDITS
AND AT THE TOP THERE THE T TWO AIRPORT PARKING GARAGE AUDIT
THE SYSTEM REPLACEMENT IS A CARRYOVER FROM 2021
WE DO HAVE CONTINGENCY AUDITS IN CASE SOMETHING CHANGES
IF SOMETHING COMES UP, WE ALWAYS LIST OUT A FEW CONTINGENCY AUDITS
SO IF WE HAVE CAPACITY OR SOMETHING GETS PUSHED OUT
WE CAN MOVE CONTINGENCY AUDIT UP RIGHT AWAY AND GET STABBED BUSY
AND THEN NEXT SLIDE, PLEASE, MICHELLE
AND LAST, BUT NOT LEAST IN CONCESSION AUDITS, WE BASE THIS BASED ON THE REVENUE OF THE CONCESSIONNAIRES
THESE ARE ALL AIRPORT AUDITS
REMEMBER THE CONCESSIONNAIRES
A LOT OF THEM
IT'S AN HONOR SYSTEM WHERE THEY SEND IN THEIR FINANCIAL STATEMENTS AND BASED ON THAT, THEY PAY US A PERCENTAGE REVENUE
SO WE CYCLE THROUGH THOSE WHEN WE CAN AND THROUGH A CYCLE
SO IF THEY'RE REALLY LARGE, WE LOOK AT THEM EVERY FIVE TO SEVEN YEARS
IF THEY'RE MEDIUM SIZE, WE LOOK AT THEM EVERY TEN YEARS
THEY'RE REALLY SMALL
IT'S MORE OF A RANDOM PROCESS
WE TRY TO GET TO MANY OF THEM
NEXT SLIDE, PLEASE, MICHELLE
AND THIS YEAR WE'VE COVERED A LOT OF THE LARGER CONCESSIONNAIRES
WE'VE GOT THREE THAT HAVE COME UP INTERSERVICES A CLEAR CHANNEL AT THE AIRPORT AVIS, AND WE'RE GOING TO BE LOOKING AT TWO THE RENTAL CAR OPERATIONS, AVIS, BECAUSE IT'S BEEN ABOUT FIVE YEARS
PLUS, WE'VE LOOKED AT THOSE AND WE'VE GOT A CONTINGENCY THAT IF WE HAVE THE RESOURCES NOW, REMEMBER THE STAFF THAT WORK ON THESE ALSO HAVE TWO OPERATIONAL AUDITS
SO THEY MOVE BACK AND FORTH BETWEEN CONCESSION AUDITS AND OPERATIONAL AUDITS
AND THEN THE NEXT SLIDE, PLEASE, MICHELLE
AND THIS SLIDE, COMMISSIONERS, IS A QUICK OVERVIEW OF HOW MANY AUDITS WE'VE DONE A YEAR WITH OUR EXISTING TEAM
SO IT'S BEEN RELATIVELY STEADY
WE'RE PROPOSING 21 AUDITS NEXT YEAR
2018 WAS ANOMALY YEAR
THAT'S WHY IT'S A LITTLE HIGH BECAUSE WE HAD A LOT OF CARRIER AUDITS
THAT'S THE YEAR I JOINED THE PORT
THEREAFTER, IT'S BEEN 19 TO 20 RANGE
AND WITH THAT, I'LL MOVE TO THE NEXT SLIDE
MICHELLE AND I'LL ENTERTAIN QUESTIONS
THIS IS A SNAPSHOT OF THE PROPOSED AUTO PLAN FOR 2022
COMMISSIONERS BOWMAN
ALL RIGHT
WELL, THANK YOU
SO LET'S MOVE ON TO QUESTIONS
COMMITTEE MEMBERS, COULD YOU PLEASE MEET YOURSELF AND QUICK HEART, PLEASE CALL ROLL FOR QUESTIONS BEGINNING WITH COMMISSIONER CHO
YEAH
GLENN, THANK YOU FOR THE PRESENTATION AND AUTO PLAN FOR 2022
I KNOW YOU AND I HAVE HAD A CONVERSATION ABOUT THIS SEPARATELY, BUT FOR THE PUBLIC AND FOR EVERYONE ELSE ON THE CALL, I JUST WANTED TO CALL OUT AND ASK THAT SOME OF THESE CAPITAL PROJECTS AUDITS THAT I WOULD ASK MAY NOT BE LOOKED AT JUST IN ISOLATION, BUT WE KIND OF COMPARE ONE PROJECT TO ANOTHER TO SEE WHERE CERTAIN COST OVERRUNS WERE, WHERE WE COULD HAVE BEEN BETTER
AND IN PARTICULAR, GIVEN THAT WE HAD, FOR INSTANCE, IF NORTH SATELLITE KIND OF RUNNING IN CONJUNCTION OR AT THE SAME TIME, HOW ONE PROJECT WAS ABLE TO CURB CERTAIN COSTS BETTER THAN THE OTHER
AND SO I WOULD ASK THAT YOU DO ALSO A COMPARISON OF PROJECTS DURING AUDIT PROCESS AND NOT JUST THE AUDITS IN SILOS
SO THAT'S THE ONLY COMMENT I HAD
THANK YOU, COMMISSIONERS
YES
NOTED
AND FOR THE PUBLIC, YES, WE WILL BE DOING THAT
AND COMMISSIONERS CHO AND I HAVE DISCUSSED THAT
THANK YOU
THANK YOU, COMMISSIONERS CHO
MEMBER GEHRKE
YEAH, THE QUESTION I HAVE TO DO WITH THE INFORMATION TECHNOLOGY AUDITS
I KNOW THAT I UNDERSTAND WHY YOU'RE SPLITTING ITC AND AVIATION MAINTENANCE BECAUSE THERE'S DIFFERENT RESPONSIBLE UNITS FOR THOSE
BUT WHAT I WANT TO KNOW IS THERE GOING TO BE SOMEONE ON YOUR TEAM, GLENN, WHO'S GOING TO LOOK AT THE FINDINGS ACROSS ALL THESE TO SEE IF THERE'S SOME COMMON TECHNOLOGY ISSUES THAT CROSS THESE THAT MAYBE NEED TO BE ELEVATED UP TO THE AUDIT COMMITTEE BECAUSE IT MAY BE MORE A SYSTEMIC ISSUE THAT MIGHT GET MISSED AS WE'RE BREAKING THE PORT INTO SMALLER CHUNKS
HOPEFULLY THAT QUESTION MAKES SENSE
ABSOLUTELY
MS COOKIE
AND I'M GOING TO ASK BRUCE CLAUS ALL TO UNMUTE HIMSELF AND PROVIDE LITTLE INPUT INTO THAT
I BELIEVE HE DOES DO THAT
BUT BRUCE PLEAD AND RESPOND TO MEMBER GEHRKE'S QUESTION
THANKS, GLENN
I'M BRUCE KAUSUL
I'M THE PORT
IT AUDIT MANAGER
AND SO IN ANSWER TO YOUR QUESTION, WE WILL DO THAT EVEN THOUGH WE'RE DOING THESE IN SEPARATE CHUNKS
IT AVIATION MAINTENANCE ARE TWO SEPARATE IT ORGANIZATIONS IN THE PORT
THEY'RE COMPLETELY SEPARATE
THEY HAVE DIFFERENT MANAGEMENT, DIFFERENT PROCESSES, DIFFERENT EQUIPMENT, DIFFERENT TECHNOLOGIES SOMETIMES
AND SO IT'S BETTER AND EASIER FOR US TO DO THE AUDIT SEPARATELY
BUT CERTAINLY WE'LL KEEP IN MIND ANYTHING THAT WE SEE BETWEEN THE TWO AREAS THAT'S COMMON OR SOMETHING THAT CAN BE IMPROVED
YOU'LL SEE SOME OF THAT, I THINK IN THE NON PUBLIC SESSION, LET ME GO OVER THE CONTINUOUS VULNERABILITY MANAGEMENT AUDIT, WHERE WE INCLUDED ALL THE IT AREAS OF THE PORT
IT MADE IT A LITTLE COMPLICATED, BUT WE WERE ABLE TO SPOT SOME OF THESE THINGS
YEAH
I JUST WANT TO MAKE SURE THE COMMITTEE KNOWS THE WHOLE OF ALL THE TECHNOLOGY ISSUES AND ANY COMMONALITIES ACROSS ALL OF THEM, BECAUSE I DON'T WANT SOMETHING LIKE THAT TO GET MISSED JUST BECAUSE OF HOW IT'S BEING REPORTED OUT INTO THE SMALLER PIECES
WE WILL BE SURE AND INCLUDE THAT
THANK YOU
MOVING TO OH, I'M SORRY
GO AHEAD
OH, THAT'S IT THE SHOW
OKAY
THANK YOU, COMMISSIONER BOWMAN, FOR QUESTIONS OR COMMENTS
GREAT
THANK YOU
IT JUST HEARD TO ME THERE'S GOING TO BE SIGNIFICANT CHANGE NEXT YEAR ON THIS COMMITTEE
OUR PUBLIC MEMBER GHERKE WILL BE LEAVING IN JULY
AND SO LOSING A LOT OF INSTITUTIONAL KNOWLEDGE
COMMUNITY MEMBER GHERKE
I REALLY APPRECIATE YOUR QUESTION AND YOUR FOCUS ON THOSE TECHNOLOGY AUDITS
YOU'VE BROUGHT A LOT OF EXPERIENCE TO THIS COMMITTEE, AND WE VERY MUCH APPRECIATE THAT
SO THANK YOU FOR BRINGING THAT UP, GLENN
MY QUESTION AGAIN, NOT A QUESTION
MORE OF A COMMENT
I REALLY APPRECIATE THE INCLUSION OF THE IAS IN THE PLAN
I WAS INVOLVED WITH THAT PROJECT
ACTUALLY, IT WAS ONE OF THE FIRST THINGS THAT I VOTED ON ALMOST EIGHT YEARS AGO WHEN I JOINED THE COMMISSIONERS WAS THE INITIAL DESIGN OF THE IAF, AND THE PROJECT HAS ADVANCED ALL THE WAY TO THE FACT THAT IT WILL BE OPENING HERE NEXT MONTH
SO WE HAD A LOT OF COSTS, A HUGE INCREASE IN THE BUDGET FOR A VARIETY OF REASONS
AND SO I REALLY APPRECIATE IT WAS IMPORTANT TO ME THAT WE INCLUDE THIS AND THANK YOU FOR DOING SO
THAT'S GOING TO BE REALLY AGAIN IMPORTANT FOR TRANSPARENCY
AND ALSO, I HOPE THAT YOU MENTIONED IT, BUT I HOPE THAT THE AUDIT WILL TAKE A GOOD LOOK AT THE GMC CONTRACTING METHOD, BECAUSE THAT WAS CERTAINLY A POINT OF DECISION MAKING WHEN THE COMMISSION AT THAT TIME
AND I BELIEVE IT HAD QUITE A BIT TO DO WITH THE EVENTUAL EXPLOSION OF THE BUDGET
IT WAS A NEW CONTRACTING METHOD FOR THE PORT, AND WE HAD A LOT OF LEARNING AND GROSS PAINS ASSOCIATED WITH THAT
SO ALL THAT TO SAY, THANK YOU VERY MUCH FOR INCLUDING IT
AND NOT MUCH ELSE WAS
GLENN, YOU WANTED TO COMMENT ON THAT? NO
YES
COMMISSIONERS BOWMAN, YOU'RE ABSOLUTELY RIGHT
YOU'VE BEEN PART OF THE VARIOUS AUDITS THAT WE'VE DONE ON THIS AND DRIVEN, AND YOU HAVE CLEARLY DRIVEN LOTS OF CHANGE WITH THE IA HAS GONE SIDEWAYS FROM TIME TO TIME
YES, WE'LL DEFINITELY LOOK AT THAT
WE'LL FOCUS ON THE CHANGE ORDERS AND COSTS, AND THERE'S JUST SOME THINGS THAT THERE'S JUST SO MUCH IT'S SUCH A BIG PROJECT THAT THERE'S SO MUCH THAT WE CAN IDENTIFY, BUT WE WILL DEFINITELY TRY TO BUILD AND IDENTIFY THINGS THAT'LL HELP THE PORT BE BETTER IN THE FUTURE
MICHELLE, I KNOW THE SLIDE VANISHED IF I PULLED THEM UP AGAIN
THE COMMISSIONERS IS ALSO SLIDE 16 ON THIS
MICHELLE, IF YOU GO ONE MORE SLIDE DOWN, WHICH TALKS ABOUT CONTINGENCY AUDITS, AS I MENTIONED EARLIER, IN THE EVENT THAT WE HAVE EXTRA CAPACITY, TIME OR SOMETHING HAS TO SHIFT, WE CAN MOVE ONE OF THESE UP AND GET IT DONE
SO WITH THAT COMMISSIONERS AND MS GEHRKE, UNLESS YOU HAVE ANY OTHER QUESTIONS, WE WILL NEED APPROVAL OF THIS
GREAT
AND ACTUALLY, I'LL JUST MAKE A QUICK COMMENT AS WELL
THANK YOU, GLENN
YOU DO A GREAT JOB OF MAKING SURE THAT WE'VE GOT SOME ROOM FOR THOSE CONTINGENCY AUDITS
AND I WOULD THINK THAT AS WE EXPERIENCED DURING THE FIRST 2020 AND ALL OF THE FEDERAL DOLLARS THAT WERE COMING IN, THE ABILITY TO HAVE SOME EXTRA BANDWIDTH WITHIN THE STAFF AND THE PLAN TO BE ABLE TO TACKLE SOMETHING THAT MIGHT COME FORWARD
I REALLY APPRECIATE YOUR FORETHOUGHT ON THAT
I WOULD IMAGINE, ACTUALLY, AS WE MOVE FORWARD WITH THE BUILD BACK BETTER AND THE VARIOUS FEDERAL DOLLARS, WE'VE GOT LITERALLY HUNDREDS OF MILLIONS OF DOLLARS COMING IN TO THE PORT IN VARIOUS WAYS
AND SO I WOULD IMAGINE THAT THOSE WOULD BE RIGHT FOR AN AUDIT AT SOME POINT
AND SO IT'S JUST GREAT TO KNOW THAT YOU'RE ALREADY THINKING AHEAD ON THOSE THINGS
JUST A COMMENT
BUT IF THERE ARE NO OTHER QUESTIONS, MICHELLE, I DO NOT SEE ANY ADDITIONAL HANDS RAISED
OKAY
WELL, THEN I WILL MAKE A MOTION FOR APPROVAL OF THE ITEM NUMBER FIVE
EXCUSE ME
ITEM NUMBER SIX
YEAH, I THINK ITEMS NUMBER FIVE AND SIX KIND OF GOT COMBINED THERE
SO THAT'S CORRECT
DO I HEAR A MOTION REMOVED? EXCELLENT
AND I WILL SECOND QUICK HEART, PLEASE HOLD FOR THE VOTE BEGINNING WITH COMMISSIONER CHO
AYE
THANK YOU
MEMBER GHERKE, I'M SORRY
NO VOTE THERE
COMMISSIONER BOWMAN
AYE THANK YOU
WE DO HAVE TWO YESSES AND ZERO NO'S FOR THIS ITEM
EXCELLENT
THE MOTION IS APPROVED
ALL RIGHT
WE'RE GOING TO MOVE ON TO ITEM NUMBER SEVEN
OPEN ISSUES
FOLLOW UP REPORT, GLENN
OKAY, MICHELLE, NEXT SLIDE, PLEASE
SO COMMISSIONERS FOR THE PUBLIC, NOT ONLY DO WE HAVE AUDIT ISSUES, WE ALSO TRY TO MAKE SURE THAT THEY DON'T GET PUT UP ON A SHELF THAT NEVER LOOKED AT AGAIN
YES
WE WANT TO MAKE SURE THEY CLOSED DOWN
AND THAT'S WHY WE TRACKED THEM
MEMBER GEHRKE WAS INSTRUMENTAL IN DRIVING THIS CHART THAT WE NOW USE
BUT IT SHOWS YOU ALL THE OPEN ISSUES AND WHERE THEY STAND FROM TIME OF REPORT ISSUANCE AND FROM TARGET DATE WHEN THE INDIVIDUALS COMMITTED TO GETTING THEM FIXED
SO FROM LAST QUARTER THAT'S BEEN RELATIVELY FLAT
IT HAS A SLIGHT UPTICK, BUT NOT IN THE ONES THAT ARE OUTSTANDING
THEY'RE REALLY THE ZERO TO SIX MONTH CATEGORY AND NOT DUE CATEGORY REPORTS
THE PANDEMIC HAS SLOWED DOWN RESOLUTION OF SOME OF THESE A BIT, BUT FOR THE MOST PART, THE BUSINESS IS WORKING ON THEM, HIGHLIGHTING JUST SOME, LIKE AD THAT SLIPPED A LITTLE BIT BEHIND
BUT I'VE HAD CONVERSATIONS WITH DAVE SOYKI AND TEAM, AND THEY ARE MOVING FORWARD WITH ADDRESSING SOME OF THEM
SO WE'LL TALK MORE ABOUT THAT NEXT YEAR IN THE FIRST QUARTER, AND THEN ON THE TECHNOLOGY FRONT, WE'LL TALK ABOUT THOSE AND NOT A PUBLIC SESSION
BUT AGAIN, MANY OF THEM HAVE BEEN ADDRESSED
THERE ARE SOME THAT ARE LONGER TERM ONES THAT ARE JUST GOING TO TAKE A LONG AMOUNT OF TIME
NEXT SLIDE, PLEASE, MICHELLE
AND COMMISSIONERS, WITH THAT, I'M GOING TO JUMP RIGHT INTO ITEM EIGHT, WHICH IS THE AUDITS, THE OPERATIONAL AUDITS EIGHT ON
SO WE'VE GOT FOUR AUDITS THAT WE'RE GOING TO TALK ABOUT BRIEFLY
HERE, TWO OF THEM, WE'RE GOING TO SPEND THE FIRST TWO WILL SPEND A LITTLE BIT MORE TIME ON, AND THE LAST TWO WILL JUST BE THEY DON'T HAVE ANY ISSUES
THEY'LL BE RELATIVELY QUICK
THREE OF THE AUDITS, THE ONES THAT READ THE PCI AUDIT, CONTINUOUS VULNERABILITY AND DATA RECOVERY WILL BE TALKED ABOUT DURING THE NON PUBLIC SESSION FROM FOUR TO FIVE
AND THAT'S WHY DECK WILL BE PRESENTED AT THAT TIME
SO WITH THAT, MICHELLE, WE CAN JUMP TO THE FIRST AUDIT CAPITALIZATION OF ASSETS, BOWMAN SHOW AND MEMBER GEHRKE, THIS AUDIT WAS A REQUEST OF MANAGEMENT, IF YOU RECALL
IN THE LAST AUDIT COMMITTEE MEETING, LOST ADAMS PRESENTED THEIR FINDINGS, AND THEY HAD AN ISSUE WHERE SOMETHING TO THE TUNE FOR THE YEAR
BUT THERE WERE 20 MILLION PLUS ASSETS THAT WEREN'T CAPITALIZED ON TIMELY BASIS
SO THEY HAD A COMMENT ABOUT THAT
AND THE CAPITAL TEAM REWORKED THEIR POLICIES AND BUILT SOME NEW CONTROLS AND PROCESSES
AND THEN THEY ASKED US TO COME AND TAKE A SECOND LOOK AT IT
SO THIS SLIDE ACTUALLY HIGHLIGHTS SOME KEY ELEMENTS
THERE'S A FORD ACCOUNTING POLICY THAT ESTABLISHES STANDARDS
WHEN YOU'RE BUILDING SOMETHING, WHEN IT'S IN PROCESS, IT'S SPLIT TO CONSTRUCTION WORKING PROCESS
AND THEN WHEN IT'S READY, IT'S COMPLETED AND WE GET OUR CERTIFICATE OF OCCUPANCY
IT'S MOVED INTO ITS CAPITAL LINES AND MOVED INTO FINANCIAL STATEMENTS INTO A DIFFERENT BUCKET
AND THEN YOU START DEPRECIATING THEM THE ASSETS
SO THE PORT HAD AT THE END OF 2020, ABOUT 1.3 BILLION IN CONSTRUCTION MARKET PROCESSES ASSETS, AND OUR CAPITAL ASSETS WERE 8 BILLION
SO A LOT OF MONEY AND A LOT OF MOVING PIECES HERE
NEXT SLIDE, PLEASE, MICHELLE
SO WE HAVE ONE LOW RISK FINDING
THIS IS ESSENTIALLY AN OPPORTUNITY FOR IMPROVEMENT
IT'S A VERY COMPLICATED PROCESS
WELL, MORE THAN COMPLICATED
THERE'S A LOT OF HANDS
THERE'S A LOT OF CONSTRUCTION MANAGERS THAT ARE WORKING ON THESE THINGS ON THE PROJECT, CONSTRUCTION LEADS
AND THEY'VE GOT TO SEND ALL OF THEIR DATA AND INFORMATION INTO ONE SEPARATE PERSON AND THAT PERSON THAT COMPILES THAT DATA, SCRUBS IT AND SENDS IT OVER TO AFR, WHO THEN RECORDS IT AND STARTS THE ACCOUNTING PROCESS DEPRECIATION AND SO ON
SO WHEN WE LOOKED AT THEIR PROCESSES AND THIS NEW PROCESS THEY PUT IN PLACE, WE LOOKED AT IT FROM THE EYES OF A CONSULTANT COMING IN
HOW DO WE HELP THEM BE BETTER AND IMPROVE THE GOALS, MICHELLE, AND RAISE SOME RECOMMENDATIONS
NEXT SLIDE, PLEASE
IT'S A LOW RATED ISSUE BECAUSE IT WAS A PARTNERSHIP
THEIR PROCESS STILL NEEDS TO BE BATTLE TESTED, AND THEIR NEW PROCESS IS THERE
THEY HAVE ESTABLISHED IT'S ABOUT MAKING IT BETTER AND HELPING IT IMPROVE
SO ONE OF THE THINGS WE HIGHLIGHTED THROUGH OUR RECOMMENDATIONS WERE THE ANNUAL REVIEW PROCESS, THE PROGRAM LEADS THAT ARE ACTUALLY DOING THE WORK
SENDING IT INTO THE CENTRAL PERSON SHOULD FORMALLY REVIEW, SIGN OFF ON THE PORT AND APPROVE IT BEFORE IT'S SUBMITTED
SO THEY TAKE A LITTLE BIT MORE OWNERSHIP RATHER THAN JUST SEND IT OVER TO CAPITAL SERVICES
THEY HAVE THESE FACILITY ASSET REVIEW MEETINGS, WHICH WE SUGGESTED HAVING A YEAR IN
THEY'RE GOING TO DO SOMETHING SLIGHTLY DIFFERENT AFTER EVERY PROJECT, WHICH I THINK IS FINE
IT'S A MATTER OF JUST HAVING A SECOND DOUBLE CHECK OF EVERYTHING
AND THAT'S WHY WE SAID A YEAR END
BUT WITH PAYNE FIELD TALK ABOUT NEXT, HOW HE'S GOING TO DO IT WORKS EQUALLY WELL
AND IT'LL HAVE TO BE BATTLE TESTED AGAIN
AND LAST NOTIFICATION AFTER ASSET TRANSFERS HAVE BEEN RECORDED IN THE FINANCIAL SYSTEM
WE SUGGESTED THAT CAPITAL SERVICES OR THE CAPITAL TEAM PROVIDE A NOTIFICATION BACK TO KEY STAKEHOLDERS SO THAT THEY CAN VALIDATE EVERYTHING THAT WAS REPORTED
AND THESE ARE JUST DOUBLE CHECKS OF WORK TO MAKE SURE WE DON'T MISS ANYTHING
SO WITH THAT, WAYNE, OR JASON, IF YOU GUYS WANT TO JUMP IN AND TALK ABOUT YOUR MANAGEMENT ACTION PLAN, AND, MICHELLE, IF YOU CAN MOVE TO THE NEXT SLIDE
YOU CAN GO FROM THERE
IT'S RELATIVELY BRIEF
SO I EXPLAINED
YEAH
THANK YOU, GWEN, AND THANK YOU AND YOUR STAFF FOR WORKING VERY CLOSELY WITH US
AS YOU SAID, WE'VE GOT A NEW [inaudible 00:59:17] STRENGTHENED PROCESS IN PLACE THIS YEAR
YOU'VE SUGGESTED SOME TWEAKS TO THAT WHICH WE AGREE WITH TWO OF THE THREE OF AND I WANT TO TURN IT TO JASON ON THE SECOND ONE, THE FACILITY ASSET REVIEW MEETING
I THINK THERE WAS JUST SOME BIT OF A MISUNDERSTANDING AS TO HOW THAT PROCESS WORKS
JASON, COULD YOU ADDRESS THAT SECOND ONE AND WHAT WE ARE PROPOSING TO DO AS A WAY TO ADDRESS THE SAME POINT, BUT NOT EXACTLY IN THE WAY IT WAS WORDED IN THE AUDIT
YEAH
HI, EVERYBODY
JASON AVIATION PROJECT CONTROLS
SO
YEAH, WE APPRECIATE THE AUDIT COMING IN
A LOT OF THESE PROCESSES WE'VE ALREADY HAD IN PLACE AND INTERNAL AUDIT RECOMMENDED THAT WE JUST DOCUMENT THEM
SO WE ARE DOING THAT IN REGARDS TO THE FACILITY ASSET REVIEW MEETING WE ARE GOING TO LOOK AT AS PART OF OUR ANNUAL PROCESS
WE HAVE A YEAR END REVIEW, EVERYTHING THAT WAS IN CONSTRUCTION IN THE CURRENT YEAR
WHAT WAS SUBMITTED? DID WE MISS ANYTHING BUT TO HAVE AN ACTUAL FARM MEETING? I WON'T PUGET TOO FAR INTO THE DETAILS OF WHAT THAT MEANS
IT'S REALLY NOT PRACTICAL BECAUSE THERE ARE A NUMBER OF PEOPLE THAT ARE INVOLVED ON EACH AND EVERY PROJECT
IT WOULD BE BEST GUESS A WEEK LONG MEETING, 8 HOURS A DAY OF AT LEAST 30 PEOPLE IN EACH MEETING
AND SO WE WON'T NECESSARILY GO RIGHT INTO THE RECOMMENDATION THAT WAS MADE
BUT WE DO RECOGNIZE THE INTENT IS TO REALLY DOUBLE CHECK AND MAKE SURE THAT IS THERE ANYTHING THAT WE HAVE MISSED? AND WE HAVE DONE THAT INVOLVING OUR PROGRAM LEADERS, OUR PROJECT MANAGERS, REACHING OUT TO OUR CONSTRUCTION MANAGEMENT TEAM MEMBERS AND EVEN CONTROL STAFF TO MAKE SURE THAT WE HAVE AT LEAST LOOKED UNDER AS MANY ROCKS AS WE CAN TO MAKE SURE THAT WE DID NOT HAVE ANYTHING THAT FALL THROUGH THE CRACKS
I DO APPRECIATE GLENN RECOGNIZING AND IDENTIFYING HOW COMPLICATED THIS PROCESS IS
A LOT OF OUR PROJECTS JUST TO GIVE SOME CONTEXT ARE ABOUT ANYWHERE FROM 100 TO THOUSANDS OF ASSETS
IF YOU LOOK AT THE IF AND THE NORTH SATELLITE AND A LITTLE BIT MORE CONTEXT ON THE NORTH SATELLITE WAS FIRST BUILT, IT WAS BOOKED IN THE SYSTEM AS ONE ASSET BUILDING, AND NOW WE'RE BREAKING THOSE DOWN AT A FAR MORE DETAILED LEVEL
I DON'T WANT TO FORGET THE CAPITAL SERVICES TEAM, TOO, WHO'S PLAYED AN INTEGRAL PART IN BEING INVOLVED WITH THIS NEW SOP AND OUR PROCESS HERE THAT'S INCREASED THE WORKLOAD A BIT, BUT HAS PROVED VERY VALUABLE AS WE'RE ALL ON THE SAME PAGE EARLY ON
HOPE THAT ANSWERS THAT QUESTION
YEAH
DOUBLE CHECKING EVERYTHING
THANK YOU, JASON AND DAN CHASE
DID YOU WANT TO MAKE ANY COMMENTS? IF YOU'RE ON THE LINE? NO, GLENN, I AM ON THE LINE
THANKS
NO, I DON'T HAVE ANYTHING MORE TO ADD
I KNOW WE'RE RUSHED FOR TIME AS WELL
SO, COMMISSIONERS, ANY QUESTIONS ON THIS ON IT? YOU CAN GO THROUGH THE ROLE THREE
COMMISSIONER BOWMAN
YES, I HAVE A QUESTION IF YOU DON'T MIND
GLENN, WHAT ARE YOUR THOUGHTS IN TERMS OF THE MANAGEMENT RESPONSE? ANY ISSUES? IT SOUNDS LIKE YOU'RE OKAY WITH THE QUOTE UNQUOTE DOUBLE CHECKING
AND JASON, I DO WANT TO SAY I APPRECIATE THE WAY THAT YOU FRAMED THIS
AND IT'S TRUE THAT'S A GREAT EXAMPLE OF THE NORTH SATELLITE BEING CALLED ONE PROJECT BACK IN THE DAY
AND EVEN OVER THE LAST FEW YEARS, WE'VE LEARNED WITH THE IAF WE MUTED TO CALL IT A PROJECT, AND NOW WE CALL IT A PROGRAM
AND SO I CAN ABSOLUTELY UNDERSTAND HOW MANY PEOPLE MIGHT HAVE TO BE INVOLVED TO DOUBLE CHECK AND DO ALL OF THAT WORK
SO THAT MAKES SENSE
I JUST WANT TO GO ON TO MY HEARING CONFIRMATION THAT YOU AGREE WITH THAT COMMISSION
BOWMAN, THANK YOU FOR ASKING
YOU KNOW, ON THE SECOND BULLET WHERE JASON WANTS TO ULTIMATELY JASON OWNS CONTROLS AND IF HE WANTS TO DO EVALUATING FOR ME FOR QUALIFYING PROJECTS RATHER THAN THE YEAR END ONE, AS HE STATED HERE, THAT'S FINE
IT'S A MATTER OF DOUBLE CHECKING IF HE WANTS TO DO IT IN THE MIDDLE PERIODICALLY ON THESE PROJECTS, IF HE STAYED HERE THAT'LL WORK, THERE ARE ENOUGH OTHER EYES AND THINGS TOUCHING THIS RIGHT NOW WHERE HE'S GOT FOR RIGHT NOW
KNOCK AT WOOD UNLESS IT CHANGES, WILL WORK
DAN CHASE GOOD
YEAH
I'M COMFORTABLE WITH THE MANAGEMENT RESPONSE
I THINK SOMETHING THAT WAS BROUGHT FORWARD DURING THE AUDIT, WHICH I THOUGHT WAS A GOOD IDEA, IS THAT WE SHOULD DESIGN A PROCESS THAT DOESN'T INCLUDE A SINGLE POINT OF FAILURE
AND SO THAT'S REALLY THE LENS THAT WE USED WHEN PERFORMING THIS AUDIT
AND LOOKING AT THE SOP
AND SO WE WANTED TO MAKE SURE THAT THERE WERE SEVERAL STEPS TO CONFIRM AND THEN RECONFIRM ACCURACY OF WHAT'S BEING REPORTED
SO IT MIGHT NOT BE EXACTLY HOW WE LAID IT OUT IN THE AUDIT REPORT
BUT BUILDING IN REDUNDANCIES IS A GOOD IDEA, WHICH I THINK WAYNE AND JASON ALSO AGREE WITH
THE FINAL THING I'LL SAY IS THAT THE MEETING, IT WOULD BE AN OPPORTUNITY TO VALIDATE THE INFORMATION, JUST ANOTHER OPPORTUNITY TO VALIDATE IT
AND WHAT I WAS NOT SUGGESTING, AND MAYBE THIS DIDN'T COME ACROSS IS THAT TO HAVE A SEPARATE MEETING TO GO PROJECT BY PROJECT, IT COULD BE AN AGENDA ITEM AT AN EXISTING FARM MEETING WHERE YOU OBTAIN NEGATIVE ASSURANCE
RIGHT
SO IF NOBODY SAID ANYTHING DURING THE MEETING AND THEY WERE GIVEN AN OPPORTUNITY TO REVIEW AND PROVIDE CORRECTIONS, THEN IF NOTHING WAS SAID, THEN YOU WOULD ASSUME THAT THE INFORMATION IS ACCURATE AND THEN AT A FUTURE TIME, IF SOMETHING DID NOT GET TRANSFERRED AT THE RIGHT TIME, THAT COULD GIVE YOU A TOOL TO GO BACK TO THE INDIVIDUAL THAT'S RESPONSIBLE FOR IT
AND ADDRESS IT FROM THAT STANDPOINT
SO IT'S JUST ONE MORE OPPORTUNITY TO REDUCE THE LIKELIHOOD THAT A TRANSFER DOESN'T GET REPORTED IN THE CORRECT PERIOD
BUT THE WAY YOU WANT TO DO IT IS REALLY UP TO YOU GUYS
MR BOWMAN, DOES THAT ANSWER YOUR QUESTION? YOU'VE REACHED A COMPROMISE AND YOU'RE ON THE SAME PAGE
YEAH, THAT'S GREAT
I KNOW WE HAVE SEVERAL ITEMS THE ONLY THING I WOULD ADD TO THIS, THOUGH, IS THAT I WOULD BE A LITTLE CONCERNED ABOUT THIS
IF NOBODY SAYS ANYTHING, WE ASSUME EVERYTHING'S FINE
I THINK IT'S ALWAYS IMPORTANT
IT'S JUST A BASIS OF ORGANIZATIONAL BEHAVIOR THAT IT'S ALWAYS IMPORTANT TO ASK THE QUESTION
DOES ANYBODY HAVE ANY CONCERNS? IS THERE ANYTHING WE'VE MISSED? SO WE'VE GOT AGAIN, A VERY COMPLEX ORGANIZATION WITH JUST TREMENDOUS PROJECT GOING ON ALL AT THE SAME TIME
SO I HOPE YOU ADD THAT EXTRA STEP
ALL RIGHT
WELL, WITH THAT, MR BOWMAN, I THINK WE STILL HAVE A COUPLE OF MEMBERS TO SPEAK
SHOULD I CALL FOR OTHER ADDITIONAL QUESTIONS? YES, COMMISSIONER CHO
I'M OKAY
I HAVE NO QUESTIONS
THANK YOU
THANK YOU
MEMBER GEHRKE? NO ADDITIONAL QUESTIONS
THANK YOU
WELL, IT'S BACK TO YOU, COMMISSIONERS CHO
I'M SORRY
COMMISSIONER BOWMAN
ALL RIGHT
I'M SORRY ABOUT THAT
I DIDN'T NEED TO STEP OVER MY COLLEAGUES
WITH THAT, WE ARE GOING TO MOVE OVER TO ITEM NUMBER EIGHT, CAPITALIZATION OF ASSETS
WE'VE MOVED TO NINE
I'M ON THE WRONG PAGE
MOVING TO NINE
EXCUSE ME
NORTH TERMINAL UTILITIES UPGRADE PHASE ONE
OKAY
NEXT SLIDE, PLEASE
MICHELLE
YES
AND JUST A TIME CHECK
WE HAVE ABOUT ELEVEN OR TWELVE MINUTES LEFT IN THE SCHEDULED PART OF THIS
YEAH, I'M GOING TO THIS PRETTY QUICKLY
SO REALLY, THE OTHER TWO DON'T HAVE ANY ISSUES
THE NEXT TWO ON IT
SO WE CAN SPEND THE BULK OF THE TIME ON THIS ONE
AND THE LAST TWO AUDITS WILL GLANCE OVER VERY QUICKLY, IF NEED BE
ONE OF THE KEY ELEMENTS I WANT TO POINT OUT HERE IS WE HAVE A GREAT WORKING RELATIONSHIP WITH CONSTRUCTION MANAGEMENT JANIS OHN AND OUR TEAM
SO WHEN WE DO THESE AUDITS, THEY'RE ALWAYS RECEPTIVE
AND I WANT TO REALLY POINT OUT THAT EVERYTHING'S ADDRESSED AND WE WORK TOGETHER REALLY WELL
SO, SPENCER, IN TWO, THREE MINUTES, IF YOU'RE AROUND, IF YOU WANT TO GO THROUGH THE ISSUE THAT YOU FOUND AND PROVIDE A LITTLE BACKGROUND IN ORDER OF ALL UTILITIES THAT WAY
THANK YOU, GLENN
I'M SPENCER BRIGHT
I AM THE PORT INTERNAL AUDIT MANAGER OVER CAPITAL PROJECTS
CAN YOU GO TO THE NEXT SLIDE, PLEASE, MICHELLE? OVERALL
SO THIS PROJECT WAS ORIGINALLY GOING TO BE ONE PROJECT, BUT BASED ON THE STRICT DEADLINE OF OPENING NORTH SATELLITE AND SOME OF THE ISSUES GOING ON AT THE IAF PROJECT, IT WAS BROKEN UP INTO TWO PHASES
SO WE REVIEWED THE FIRST PHASE
NEXT SLIDE, PLEASE
WE ISSUED ONE FINDINGS RELATED TO INSTANCES WHERE THE PORT SOP STANDARD OPERATING PROCEDURES WERE NOT FOLLOWED RELATED TO CHANGE ORDERS
SOME EXAMPLES THAT WE NOTED WERE ONE INSTANCE WHERE THE CONTRACTOR DIDN'T NOTIFY THE PORT WHEN IT WAS APPROACHING 80% OF THE NOT TO EXCEED AMOUNT ON A CHANGE ORDER
WE ALSO NOTED AN INSTANCE WHERE THE PORT DIDN'T PREPARE A COST ESTIMATE PRIOR TO APPROVING SEO
ANOTHER EXAMPLE, SOME OF THE FINALIZED CHANGE ORDERS DIDN'T HAVE INCLUDE THE REQUIRED SIGNATURES AND ON THE COVID EXPENSE CHANGE ORDER THAT WE REVIEWED, WE DID NOTICE SOME PAYROLL DISCREPANCIES BETWEEN SUBCONTRACTOR TIMESHEETS AND THE DAILY FORCE ACCOUNT FIELD DOCUMENT SHEETS, WHICH THEY SUBMIT TO THE PORT AS THEIR SUPPORTING DOCUMENTATION
NEXT SLIDE, PLEASE
WE PROVIDED MANAGEMENT WITH SOME RECOMMENDATIONS AND IMPROVEMENT RECOMMENDATIONS, COMPLAINTS WITH THE STANDARD OPERATING PROCEDURES
AND NEXT SLIDE, PLEASE
THAT SHOULD BE FOR JANICE
YES
JANICE IS UNAVAILABLE TO DISCUSS MANAGEMENT ACTION PLAN
YES
THANK YOU, SPENCER
THANK YOU, GLENN
HELLO
SO, YES, THIS IS OUR MANAGEMENT RESPONSE
WE ALWAYS APPRECIATE THE PARTNERSHIP WITH INTERNAL AUDIT TO PROVIDE US WITH THAT INDEPENDENT REVIEW AND MAKE SURE THAT WE'RE ALWAYS CONTINUOUSLY IMPROVING IN THE WORK THAT WE DO
WE HAVE A ROBUST STANDARD OPERATING PROCEDURES
AND YET IT'S ALWAYS GOOD TO MAKE SURE THAT THOSE PIECES ARE TESTED AND TO REVALIDATE THE TRAINING THAT MIGHT BE NEEDED AND OVERSIGHT OF OUR STAFF, ESPECIALLY AS WE BRING IN NEW PEOPLE, BOTH CONSULTANTS AS WELL AS NEW BACKFILLS FOR THOSE STAFF THAT HAVE LEFT OR RETIRED FROM THE PORT
SO WE TOOK THESE RECOMMENDATIONS TO HEART, AND OUR STAFF HAVE REVIEWED OUR STANDARD OPERATING PROCEDURES TO LOOK AT THOSE AREAS, THAT IT CAN BE STRENGTHENED SO THAT WE AVOID THESE TYPES OF THINGS IN THE FUTURE
SO I'M OPEN TO QUESTIONS OR COMMENTS
I CAN CALL THE ROLL FOR ANY QUESTIONS
PLEASE DO
THANK YOU
BEGINNING WITH COMMISSIONER CHO
NO QUESTIONS
THANK YOU SO MUCH
THANK YOU, MEMBER GEHRKE
NO QUESTIONS
THANK YOU
THANK YOU, COMMISSIONER BOWMAN
I DON'T HAVE ANY QUESTIONS EITHER
THANK YOU SO MUCH, JANICE
THANK YOU FOR BEING HERE
THANKS, JANICE
ALL RIGHT
HEY, MOVING FORWARD, COMMISSIONERS BOWMAN, IN THE INTEREST OF TIME, I'LL MOVE THROUGH THESE LAST FEW FERRY QUICKLY
NO, TWO OF THE ODDS THAT I'LL DISCUSS WON'T HAVE ANY ISSUES
ONE IS BACKGROUND INFORMATION
SO LET'S START WITH THIS CONCESSION DEFERRAL RECOVERY
THIS IS A COMMISSION REQUEST AND SOMETHING THAT THE SEO WAS GOING TO COME IN ON THEIR LIST
SO WE WENT OUT
WE DID THE WORK
WE LOOKED AT THE PROGRAM THAT WERE IN PLACE JUST TO SHOW THAT THE PORT WAS DOING EVERYTHING CORRECTLY
NEXT SLIDE, PLEASE
MICHELLE
WE DID FIND THAT EVERYTHING WAS FINE
THERE WERE NO ISSUES, EVERYTHING
THE CONTROLS WERE ROBUST AND THE SEO CAME IN, LOOKED AT OUR WORK, SIGNED OFF ON IT
AND BECAUSE OF THE WORK WE DID, THEY DID NOT HAVE TO DO ANY WORK ON THIS
SO AS FAR AS RECOVERING THE DEFERRED RENT CONCESSION REVENUE, BECAUSE THE PANDEMIC SUPPORT PASS ARE CHECKED OUT OVER THERE
NEXT SLIDE, MICHELLE
AND ONE MORE
OKAY, PCI, WE'RE GOING TO TALK ABOUT THIS NON PUBLIC SESSION IN MORE DETAIL
BUT INTERNAL AUDIT DOES DO THE PORT DID DO THE PCI AUDIT IN 2021
JUST TO NOTE, WE DO HAVE AN INDIVIDUAL THAT WENT OUT WITHIN OUR TEAM, GOT THE APPROPRIATE CERTIFICATION, AND IT'S QUITE A LOT OF WORK
BUT WE PULL IN OVER $80 MILLION IN REVENUE AT THE AIRPORT PARKING GARAGE AND THEN ALSO THROUGH THE MARINAS
WE HAVE QUITE A BIT OF REVENUE THAT COMES IN THERE
AND BECAUSE OF THAT, BANKS, VISA, MASTERCARD AND AMERICAN EXPRESS REQUIRE US TO DO THIS ON AN ANNUAL BASIS
AND YOU HAVE TO PASS EVERY SINGLE CONTROL IN ORDER TO PASS
THERE'S 331 CONTROLS THAT YOU HAVE TO PASS
AND HAPPY REPORT DID PASS PCI AUDIT IN 2021
NEXT SLIDE, PLEASE
AND FINALLY, COMMISSIONER GOLDMAN AND DILETTANTE CHOCOLATE WAS ANOTHER AUDIT
WE DID, AND IT'S A LARGE AUDIT WITH CONCESSION FEES OF ABOUT NEARLY $600,000 A YEAR IN NORMAL OPERATIONS
SO IT'S AMAZING HOW BUSY THEY ARE
NEXT SLIDE, PLEASE
BUT THAT IS A CLEAN AUDIT AND THERE ARE NO ISSUES THERE
SO WITH THAT, I'LL PASS IT BACK TO YOU, COMMISSIONERS BOWMAN, FOR THE NEXT FEW MINUTES FOR ANY COMMENTS, QUESTIONS OR ANYTHING ELSE
LET'S GO TO CLERK HART, COULD YOU ASK EVERYONE TO PLEASE, MICHELLE? APOLOGIES
I WAS STILL MUTED
I'M JUST SITTING HERE TALKING TO MYSELF
SO THANK YOU, MR FERNANDEZ
THERE WAS A COUPLE OF ITEMS THERE THAT WERE COMBINED TOGETHER, SO I'M GOING TO CALL IF ANYBODY HAS QUESTIONS ON ANY OF THOSE BEGINNING WITH COMMISSIONERS CHO
NO QUESTION
THANK YOU
THANK YOU
MEMBER GEHRKE
NO QUESTIONS FOR ME
THANK YOU
THANK YOU, COMMISSIONER BOWMAN
NO QUESTION
I THINK IT'S VERY IMPORTANT TO NOTE THAT THERE WERE NO ISSUES RELATED TO THE CONCESSION DEFERRAL RECOVERY
I THINK THAT'S REALLY IMPORTANT
IT WAS SOMETHING THAT THE COMMISSION DEBATED HEAVILY
WE WORKED VERY HARD TO TRY AND PUT TOGETHER A PROGRAM WHERE WE COULD PROVIDE RELIEF TO OUR TENANTS
AND WE WANTED TO MAKE SURE THAT WE WERE DOING IT IN EVERY LEGAL MEANS
SO I'M REALLY, REALLY HEARTENED TO LEARN AND PUGET CONFERENCE TO GET CONFIRMATION THAT THAT HAS HAPPENED
SO, GLENN, THANK YOU FOR BRINGING THAT UP WITH THAT, WE HAVE A COUPLE OF ITEMS ITEMS NUMBER 1112 AND 13 ARE SECURITY SENSITIVE, AND THEREFORE WE'LL BE DISCUSSED IN THE NON PUBLIC PORTION OF THE MEETING
THOSE ITEMS, WE FINISHED OUR OTHER ITEMS TODAY
AND SO WITH THAT, WE WILL BE MOVING TO RECESS OF THE NON PUBLIC PORTION OF THE MEETING TO ADDRESS THOSE WHICH SPECIFICALLY ARE THE INFORMATION TECHNOLOGY AUDIT ITEMS AND THE INFORMATION TECHNOLOGY AUDIT ITEMS PERIOD
HOWEVER, BEFORE WE GET TO THE NON PUBLIC PORTION, I JUST WANTED TO TAKE A MOMENT RIGHT NOW TO RECOGNIZE THE INCREDIBLE CONTRIBUTIONS OF CHRISTINA GEHRKE
SHE SERVED AS A PUBLIC MEMBER OF THE PORT COMMISSION'S AUDIT COMMITTEE FOR MANY, MANY YEARS
CHRISTINA, IT REALLY HAS BEEN AN HONOR TO SERVE WITH YOU OVER MY EIGHT YEARS ON THE PORT COMMISSIONERS
I'VE LEARNED A LOT
I PAY A LOT OF ATTENTION TO THE QUESTIONS THAT YOU ASK
YOU HAVE AN ENORMOUS AMOUNT OF EXPERIENCE AND YOU HAVE BEEN A TRUE PUBLIC SERVANT AND BEING WILLING TO OFFER UP YOUR TIME AS A VOLUNTEER TO OVERSEE THIS COMMITTEE
SO I JUST WANT TO THANK YOU ON BEHALF OF THE COMMISSIONERS AND ALSO MY PERSONAL THANKS
I BELIEVE GLENN HAS A FEW WORDS HE WOULD LIKE TO SHARE AS WELL
SO, GLENN, YOU HAVE THE FLOOR
WELL, I WANT TO SAY THANK YOU AGAIN AS WELL
THE DEPARTMENT, OUR MEETINGS BEFORE EVERY HONOR COMMITTEE HAVE SPENT TIME OVER THE LAST FIVE YEARS WITH CHRISTINA, AND WE'VE GONE THROUGH THE ENTIRE PACKAGE ALL THE ISSUES, AND SHE'S REALLY DEDICATED A LOT OF TIME TO THIS
THIS IS ALL WITH HAVING A FULL TIME JOB AND ACTUALLY MULTIPLE FULL TIME JOBS BECAUSE SHE'S A PROFESSOR, SHE WORKS IN THE PRIVATE SECTOR, AND SHE DOES A LOT OF VOLUNTEER WORK
SO THANK YOU FOR ALL OF THAT
SHE'S EVEN HAD THE ENTIRE INTERNAL AUDIT DEPARTMENT COME OUT AT LUNCH HOUR
SHE'S A BOARD MEMBER AT UPLIFT NORTHWEST, AND IT'S THE MILLIONAIRE'S CLUB OVER ON ELLIOTT BAY
THE TEAM FED THE HOMELESS FOR THE AFTERNOON, AND CHRISTINA DOES A LOT OF CHARITY WORK THERE
AFTER THIS MEETING, SHE'S GOT TO GO TO A FORWARD MEETING THERE AT THE WORLD TRADE CENTER
SO, CHRISTINA, YOU DO HAVE THAT CERTIFICATE THAT THE COMMISSION WROTE? YEAH, I GOT A CERTIFICATE RIGHT HERE
HARD TO SEE, BUT I GUESS IT DOESN'T COME ACROSS, BUT THANK YOU EVERYONE FOR SIGNING THAT
AND IT'S BEEN MY PLEASURE TO SERVE
AND I WILL MISS THESE MEETINGS, AND I'M ALWAYS AVAILABLE FOR ANYTHING THAT COMMITTEE MIGHT NEED
THAT'S WONDERFUL
THANK YOU
CHRISTINA
MR CHO, DO YOU HAVE ANY COMMENTS TO ADD? YEAH
I ALSO JUST WANT TO ECHO THOSE SENTIMENTS
I'VE ONLY BEEN ON THE AUTO COMMITTEE FOR A YEAR, BUT IN THAT SHORT PERIOD OF TIME, I REALLY QUICKLY LEARNED THE TREMENDOUS VALUE ADD, HAVING MS CHRISTINE WITH US HAS BEEN
SO I SERIOUSLY APPRECIATE YOUR TENURE HERE
WE'RE GOING TO MISS YOU
WHOEVER REPLACES YOU FROM THE PUBLIC IS GOING TO HAVE BIG SHOES TO FILL
BUT YOU SHOULD KNOW THAT YOU ALWAYS HAVE A HOME HERE AT THE PORT OF SEATTLE AND WE'LL SEE YOU AROUND
I'M SURE
THANK YOU
ALL RIGHT
WELL, WITH THAT, ANY FINAL COMMENTS FROM COMMITTEE MEMBERS BEFORE WE RESET? I AM NOT SEEING ANYTHING
OKAY? NOT SEEING ANYTHING
ALL RIGHT
WELL, HEARING FOR THE COMMENTS
ACTUALLY, WE'RE NOT GOING TO TAKE A BREAK BECAUSE WE GOT THIS STARTED LATE TODAY, SO WE NEED TO JUMP RIGHT INTO THE NON PUBLIC PORTION OF OUR MEETING TO BEGIN HERE
WE'RE ALREADY RUNNING A LITTLE LATE
WE'LL BEGIN HERE AT ABOUT FOUR OR THREE
WE'LL BE DISCUSSING THREE MATTERS RELATED TO SECURITY SENSITIVE INFORMATION
THE PUBLIC PORTION OF THE MEETING WILL LAST APPROXIMATELY 60 MINUTES, AND THE MEETING WILL ADJOURN WITH NO FURTHER BUSINESS
AFTER THAT TIME, PARTICIPANTS JOINING THE NON PUBLIC PORTION OF THE MEETING
WOULD YOU PLEASE CLOSE OUT OF THE MEETING LINK AND JOIN AT THE 04:00 TEAM MEETING INVITATION? THE CURRENT TIME
NOW IS 402 THANK YOU
THANK YOU, EVERYONE
GOOD MEETING.

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