INTERNAL AUDIT REPORT

COMPREHENSIVE OPERATIONAL AUDIT

AIRPORT PUBLIC PARKING OPERATION

JANUARY 1, 2013 – APRIL 11, 2014

ISSUE DATE: MAY 20, 2014

REPORT NO. 2014-03

INTERNAL AUDIT REPORT

AIRPORT PUBLIC PARKING OPERATION

JANUARY 1, 2013 – APRIL 11, 2014

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TABLE OF CONTENTS

TRANSMITTAL LETTER ......................................................................................................................... 3

EXECUTIVE SUMMARY ......................................................................................................................... 4

BACKGROUND ..................................................................................................................................... 5

AUDIT SCOPE AND METHODOLOGY ...................................................................................................... 5

CONCLUSION ....................................................................................................................................... 7

INTERNAL AUDIT REPORT

AIRPORT PUBLIC PARKING OPERATION

JANUARY 1, 2013 – APRIL 11, 2014

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TRANSMITTAL LETTER

Audit Committee

Port of Seattle

Seattle, Washington

We have completed an audit of Airport Public Parking Operation, which is within the Landside

Operations Department.

We reviewed information relating to public parking revenue from January 1, 2013 - April 11, 2014.

We conducted the audit in accordance with Generally Accepted Government Auditing Standards

and the International Standards for the Professional Practice of Internal Auditing. Those standards

require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a

reasonable basis for our findings and conclusions based on our audit objectives. We believe that the

evidence obtained provides a reasonable basis for our findings and conclusions based on our audit

objectives.

We extend our appreciation to the management and staff of Public Parking, Employee Parking,

Aviation Maintenance, and Accounting and Financial Reporting (AFR) for their assistance and

cooperation during the audit.

Joyce Kirangi, CPA, CGMA

Internal Audit, Director

AUDIT TEAM:

RESPONSIBLE MANAGEMENT TEAM:

Benjamin W. Wolfgram, Internal Auditor

Diane

Santiago, Manager, Landside Operations

Jack Hutchinson, Audit Manager

Jeff Hoevet, Senior Manager, Landside Operations

INTERNAL AUDIT REPORT

AIRPORT PUBLIC PARKING OPERATION

JANUARY 1, 2013 – APRIL 11, 2014

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EXECUTIVE SUMMARY

Audit Scope and Objective

The purpose of the audit was to determine whether:

1. Airport public parking operation management controls are adequate to ensure:

• Parking exception transactions are properly reviewed, approved, and documented.

• Recorded cash and credit card transactions are reconciled to bank deposits.

• Parking fees are charged in compliance with Commission-approved tariff rates.

2. The parking revenue system completely captures a record of each vehicle exiting the

parking garage.

We reviewed Airport Public Parking information for the period January 1, 2013 – April 11, 2014.

BACKGROUND

The Port of Seattle owns and operates the Seattle-Tacoma International Airport (STIA) parking

garage. Airport Public Parking, which is within the Landside Operations Department, manages the

day-to-day receipting operation of the parking garage. Commission-approved Airport Tariff No. 1

establishes the schedule for parking rates. Excluding exception transactions, the system

automatically calculates parking fee based on the parking location and duration of the stay.

Airport Public Parking uses an automated parking revenue system to process parking transactions

and to report parking revenue. Aviation Maintenance Electronics Technicians (ETs) provide

technical support to the automated system. Public Parking has three revenue control auditors who

monitor the cashiers’ daily parking transactions, with a focus on exception transactions, such as

lost or unreadable tickets. Airport Public Parking also works closely with the Accounting and

Financial Reporting (AFR) Department, to reconcile parking revenue and credit card payments.

Annual airport parking revenue of $50 million is the single largest source of revenue generated from

a Port-operated activity and is a significant portion of total Port revenue. Credit cards are the

most common method of payment, comprising almost 95% of total parking receipts in 2012 and

2013.

Audit Result Summary

Management controls are adequate to ensure that exception transactions are properly reviewed,

approved and documented, recorded cash and credit card transactions are reconciled to bank

deposits, and parking fees are charged in accordance with the Commission-approved tariff. The

tube-counting devices captured 99.2% of the vehicles exiting the garage when compared to the

vehicle records captured in the parking revenue system.

AUDIT SCOPE AND

OBJECTIVES

BACKGROUND

AUDIT RESULT SUMMARY

INTERNAL AUDIT REPORT

AIRPORT PUBLIC PARKING OPERATION

JANUARY 1, 2013 – APRIL 11, 2014

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Background

The Port of Seattle owns and operates the Seattle-Tacoma International Airport (STIA) parking

garage. Airport Public Parking, which is within the Landside Operations Department, manages the

day-to-day receipting operation of the parking garage. Commission-approved Airport Tariff No. 1

establishes the schedule for parking rates. Excluding exception transactions, the system

automatically calculates parking fee based on the parking location and duration of the stay.

Public Parking uses an automated parking revenue system to process parking transactions and to

report parking revenue. Aviation Maintenance Electronics Technicians (ETs) provide technical

support to the system. Public Parking has three revenue control auditors who monitor cashiers’

daily parking records, with a focus on exception transactions, such as lost and unreadable tickets.

Public Parking also works closely with the Accounting and Financial Reporting (AFR) Department to

reconcile parking revenue and credit card payments.

In addition to fee-paying customers, there are programs offering free parking privileges to those

with legitimate Port-related or sponsored business at the airport. These programs include

validations for organizations such as Port Jobs and the USO. Airport employees also do not pay and

have access cards to the garage. There are a number of payment methods: payment can be through

the Pay-on-Foot (POF) machines (credit cards only), which are located inside the parking garage,

cashiers at the Toll Plaza exit lanes, or credit card inserted into readers at the exit lanes. Excluding

exception transactions, the system automatically calculates parking fee based on the parking

location and duration of the stay. Further, some exception transactions require the approval of a

parking supervisor.

Annual airport parking revenue of $50 million is the single largest source of revenue generated from

a Port-operated activity and is a significant portion of total Port revenue. Credit cards are the

most common method of payment, comprising almost 95% of total parking receipts in 2012 and

2013.

Audit Scope and Methodology

Our audit focused on management controls over parking receipting operations, utilizing system

reports and other information. This audit is the first audit of a complete review of the parking

PUBLIC PARKING RECEIPTS

Payment Type 2012 Receipts

2013 Receipts

Cash $2,925,112

5.5%

$2,874,971

5.2%

Credit Card 50,725,355

94.5%

52,655,053

94.8%

OTAL

$53,650,467

100.0%

$55,530,023

100.0%

Data Source: Port Parking Revenue System

BACKGROUND

AUDIT

SCOPE AND METHODOLOGY

FINANCIAL HIGHLIGHTS

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JANUARY 1, 2013 – APRIL 11, 2014

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revenue system. A second audit with an information technology focus is under consideration as part

of our 2014 work plan.

We reviewed information for the period January 1, 2013 - April 11, 2014. We utilized a risk-based

audit approach from planning to testing. We gathered information through interviews,

observations, analytical procedures, and reviews of department policies and procedures, in order

to obtain a complete understanding of the Airport Public Parking operation. We assessed risks and

identified management controls established to mitigate related risks. We tested and evaluated

whether the controls were functioning as intended.

We applied additional detailed audit procedures to areas with the highest likelihood of significant

negative impact as follows:

1. To determine whether airport public parking operation management controls are adequate

to ensure:

• Parking exception transactions are properly reviewed, approved, and documented.

• Recorded cash and credit card transactions are reconciled to bank deposits.

• Parking fees are charged in compliance with Commission-approved tariff rates.

We selected a sample of four days between January 1, 2013, and April 11, 2014, and

reviewed system daily records to verify that management controls were functioning as

intended. We tested daily cashiers’ reports and records to determine whether there was:

• Proper documentation and authorization of exception transactions.

• Tracking of change funds.

• Appropriate use and documentation of supervisor access cards.

• Effective reconciliation of receipts to deposits.

• Adequate daily review or monitoring by the parking revenue control auditors.

• Daily reconciliation of credit card receipts to transaction records and bank deposits.

We also tested revenue transactions for one of the sample days and verified that parking

fees charged were in accordance with the Commission-approved tariff rates.

2. To determine whether the parking revenue system completely captures a record of each

vehicle exiting the parking garage.

We employed a contractor to count vehicles exiting the parking garage facility from each of

the 14 Toll Plaza exit lanes using pneumatic tube counting devices. We conducted the test

without interruption (i.e., 24/7) for a period of four weeks from March 15, 2014 - April 11,

2014. We retained video footage for the entire testing period of all exiting vehicles and used

the footage where necessary to verify the counts.

We compared the results to the count of exiting vehicles, as recorded by the parking system

in the table that logs non-financial parking events, to determine whether the system has a

record for each exiting vehicle.

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AIRPORT PUBLIC PARKING OPERATION

JANUARY 1, 2013 – APRIL 11, 2014

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Conclusion

Management controls are adequate to ensure that exception transactions are properly reviewed,

approved and documented, recorded cash and credit card transactions are reconciled to bank

deposits, and parking fees are charged in accordance with the Commission-approved tariff. The

tube-counting devices captured 99.2% of the vehicles exiting the garage when compared to the

vehicle records captured in the parking revenue system.

CONCLUSION