3. Presentation

2022 Audit Exit Conference

Port of Seattle
Report on 2022 Audit Results

• Reports Issued
• Areas of Audit Emphasis
• Internal Control Matters
• Matters Required to be Communicated to
the Audit Committee
• Upcoming Accounting Pronouncements
• Other Communications

2 Port of Seattle 2022 Audit Results

                        Auditor Reports Issued
Auditor Report on Financial Statements for     •   Unmodified opinion
the Enterprise Fund and the
Warehousemen’s Pension Trust Fund          •  Dated April 28, 2023

Report on Internal Control Over Financial      •   No internal control or compliance findings
Reporting and on Compliance and Other
Matters                                    •  Dated April 28, 2023

•    No internal control or compliance findings
Report on Compliance for the Major            •   The Schedule of Expenditures of Federal
Federal Program and on Internal Control           Awards (SEFA) is presented fairly in all
Over Compliance; Report on Schedule of           material respects in relation to the financial
Expenditures of Federal Awards Required          statements
by the Uniform Guidance (Single Audit)        •   One Major Program – Airport Improvement
Program with $174 million in federal funds
received (of which $149.4 million in COVID-
19 funding).
3 Port of Seattle 2022 Audit Results

                   Auditor Reports Issued (continued)
•   Audit and report on the schedule of
Passenger Facility Charge (PFC) receipts
and expenditures and related internal
•   Report on the Schedule of Net Revenues
Available for Revenue Bond Debt Service

•   Report on Agreed Upon Procedures for
Washington State Department of Ecology
(to be completed in May)

•   Report on Agreed Upon Procedures for
Environmental Protection Agency (to be
completed in May)
4 Port of Seattle 2022 Audit Results

                       Areas of Audit Emphasis
•    Internal control environment
o  Capital assets/project management, cash receipts/receivables, cash disbursements/payables,
payroll, bond and investment transactions, and administration of federal awards with focus on
COVID-19 funding
•    Management estimates
o  Allowance for doubtful accounts, environmental remediation liability, legal contingencies and
insurance recoveries, compensated absences, actuarial valuations for pension and other postemployment
benefits amounts
•    Northwest Seaport Alliance (NWSA) joint venture
o  Confirmed the Port of Seattle’s share in operating revenue through agreement to NWSA audited
financial statements
•    Capital assets
o  Consideration of capitalization policies, testing of additions, retirements, overhead application, and
depreciation; consideration of timely closing of capital improvement projects

5 Port of Seattle 2022 Audit Results

                   Areas of Audit Emphasis (continued)
•    Bond activity
o  Tested the five new bond issuances and four refunding bonds during 2022.
o  Debt repayments, arbitrage liability, discounts and premiums, compliance with covenants, and
procedures over information presented in the net revenues schedule
•    Airline lease and operating agreement
o  Analysis of revenue requirement by cost center category under the Signatory Lease and Operating
Agreement (SLOA IV) agreement, including landing fees, terminal rents, gate fees, and baggage claim
o  Confirmations of amounts on an airline-by-airline basis
•    Revenue recognition
o  Operating revenue analysis using business indicators such as landed weight, enplanements, gate
usage, and boat counts
o  Ad valorem tax levy, investment income, PFC, Customer Facility Charges (CFCs), and federal grants
o  Consideration of the collectability of related receivables

6 Port of Seattle 2022 Audit Results

                   Areas of Audit Emphasis (continued)
•    Adoption of GASB 87
o  Tested management’s assessment of in-scope leasing arrangements for the Port as a Lessor and as a
o  Reviewed significant estimates, NPV calculations, and disclosures
o  Selected a sample of lease agreements and reperformed management’s calculations
o  Tested restated results for the years ended December 31, 2020 and 2021
o  Overall restatement impact to the ACFR:
o   Added lease receivables of $345M
o   Added deferred inflows from leasing of $345M
o   Added intangible leased assets of $8.5M and accumulated amortization of $3.8M
o   Added lease liabilities of $4.7M
o   Decrease of $11M and $12M of operating revenues in FY20 and FY21, respectively

7 Port of Seattle 2022 Audit Results

                   Areas of Audit Emphasis (continued)
•    Fiduciary activities
o  Consideration of investment balances, plan contributions and distributions for the Warehousemen’s
Pension Trust Fund
•    Information technology
o  General Computer Controls
•    One major federal program identified and tested current year –
o  Total federal awards reported on schedule of expenditures of federal awards – $175.4M
o  Major program – FAA Airport Improvement Program – $174.3M including COVID Relief funding of

8 Port of Seattle 2022 Audit Results

                    Required Communications
•    Auditor and Management responsibilities for financial statements under Generally
Accepted Auditing Standards
o  To form and express an opinion about whether the financial statements are fairly presented; to
plan and perform the audit in accordance with generally accepted auditing standards and
Government Auditing Standards
o  Our audit does not relieve Port management and the Port Commission of its responsibilities
•    Audit was performed according to the planned scope
•    Significant accounting policies are summarized in Note 1 to the financial
•    Financial statement disclosures were consistent, clear and understandable
•    Representations were requested and received from management
•    There were no disagreements with management or difficulties encountered during
the audit
9 Port of Seattle 2022 Audit Results

                 Required Communications (continued)
•    There were no uncorrected audit
adjustments identified
•    Consultation with other independent
auditors (none of which we are aware)
•    Illegal acts (none noted)
•    Ability to continue as a going concern (no
disclosure necessary)
•    Consideration of fraud in a financial
statement audit
o  Procedures performed included journal entry
testing, deferred payment plan analysis, and
interviews of personnel

10 Port of Seattle 2022 Audit Results

            New & Upcoming Accounting Pronouncements
•    New accounting pronouncements implemented in 2022
o  GASB 87 – Leases: Addresses recognition of certain lease assets and liabilities for leases that previously were
classified as operating leases.
o  GASB Statement No. 91, Conduit Debt Obligations
o  GASB Statement No. 92, Omnibus 2020 GASB Statement
o  GASB Statement No. 93, Replacement of Interbank Offered Rates
•    Upcoming accounting pronouncements
o  GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements
(effective 2023)
o  GASB Statement No. 96, Subscription-Based Information Technology Arrangements (effective 2023)
o  GASB Statement No. 99, Omnibus 2022 (effective 2023)
o  GASB Statement No. 100, Accounting Changes and Error Corrections (effective 2024)
o  GASB Statement No. 101, Compensated Absences (effective 2024)
We have been working with management to plan for the implementation of these standards.

11 Port of Seattle 2022 Audit Results

•     Regular status meetings were held between Moss Adams
and Port management and staff throughout the audit term
•     Technical ‘whitepapers’ were received from Port
management throughout the year
•     The audits progressed on time and in an orderly fashion,
fully in a remote work environment
•     All Port personnel organization wide were responsive and
fulfilled all our requests in a timely manner
•     ‘Tone at the Top’ and attitude from management was one
of openness in response to audit requests and discussion
•     As planned, Branch Richards & Co. personnel and
Ryland School Business Consulting personnel were an
integral part of our audit team. Over 12% of our audit fee
for the audit was to these small business and minorityowned
12 Port of Seattle 2022 Audit Results


Contact Us

+   Olga A. Darlington             +   Anna Waldren                   +   Connor McCauley

Olga.Darlington@mossadams.com                 Anna.Waldren@mossadams.com                    Connor.McCauley@mossadams.com
(425) 551-5712                                    (206) 302-6282                                       (206) 302-6793

13  Port of Seattle 2022 Audit Results

                                                        The material appearing in this presentation is for informational purposes only and should not be
construed as advice of any kind, including, without limitation, legal, accounting, or investment advice.
This information is not intended to create, and receipt does not constitute, a legal relationship, including,
but not limited to, an accountant-client relationship. Although this information may have been prepared
by professionals, it should not be used as a substitute for professional services. If legal, accounting,
investment, or other professional advice is required, the services of a p rofession al sh ould be so ught .
Assurance, tax, and consulting offered through Moss Ada ms LLP. Inves tment advisor y off ere d throug h
Moss Adams Wealth Advisors LLC. Investment banking offered throu gh Moss Adam  s Capital LLC.


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