Audit Committee Minutes of May 7, 2020, submitted for review on September 18, 2020, and proposed for approval on September 24, 2020.
APPROVED MINUTES
AUDIT COMMITTEE SPECIAL MEETING MAY 7, 2020
The Port of Seattle Commission Audit Committee met in a special meeting Thursday, May 7, 2020. The
meeting was held remotely in accordance with the governor’s ‘Stay at Home’ order and Proclamation 20-28.
Committee members present included Commissioner Calkins, Commissioner Bowman, and
Christina Gehrke. Also present were Glenn Fernandes, Director, Internal Audit; Dan Chase, Internal Audit
Manager; Aaron Pritchard, Commission Issues and Policy Manager; Amy Dressler, Interim Commission
Clerk, and Lauren Smith, Deputy Commission Clerk.
Call to Order:
The committee special meeting was called to order at 1:30 p.m. by Commissioner Calkins.
Approval of Audit Committee Meeting Minutes of February 11, 2020:
The minutes of the Audit Committee special meeting of February 11, 2020, were approved without
objection.
External Audit -- Office of the Washington State Auditor – Accountability Audit for 2018
The Committee received a presentation from Aron Keleta and Joseph Simmons that contained the following
information:
• The audit covered the Industrial Development Corporation, self-insurance programs, Bell Harbor
Marina petty cash, fire department overtime pay, professional services contracts, electronic fund
transfers, and employees used for public work projects.
• The audit results were clean, with a handful of minor exit recommendations.
• The audit for 2019 will commence in September.
Updates and Approvals:
The committee received a presentation from Glenn Fernandes that included the following information:
• The required annual communications regarding the Internal Audit department’s independence,
quality assurance, and follow-up procedures were delivered.
• The status of the 2020 Audit Plan was summarized. Some items are behind due to pandemic-related
complications.
• Internal Audit researched potential Federal Emergency Management Agency (FEMA) reimbursable
expenditures and provided a report. FEMA will reimburse certain expenses including emergency
operation center costs, disinfection of public facilities, and medical sheltering.
P.O. Box 1209
Seattle, Washington 98111
www.portseattle.org
206.787.3000
PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES Page 2 of 3
THURSDAY, MAY 7, 2020
Audit Committee Minutes of May 7, 2020, submitted for review on September 18, 2020, and proposed for approval on September 24, 2020.
• In response to a December request from Commissioner Calkins, Internal Audit performed an
Interlocal Agreement Mapping and Risk Ranking project and provided a list which will be used to
develop the 2021 audit plan.
Operational Audit – Cash Controls:
The Committee received a presentation from Glenn Fernandes and management response from
Kenneth Lyles and Jim Peterson that included the following information:
• This audit looked at cash receipts at Fishermen’s Terminal, Shilshole Bay Marina, and airport Lost
and Found.
• It was determined that cash processes at Fishermen’s Terminal and Shilshole Bay did not have
adequate segregation of duties.
o Key control enhancements were recommended.
o Management implemented several measures to increase cash control.
• It was found that airport Lost and Found staff did not follow established procedures for handling cash.
• It was recommended that the Aviation Customer Service Team and the vendor (Hallmark) establish
a process to monitor compliance with cash handling procedures.
Operational Audit – Equipment Acquisition, Monitoring and Disposal:
The Committee received a presentation from Glenn Fernandes and management response from
Randy Krause and Laurel Dunphy that included the following information:
• This audit was conducted to follow up on a hotline complaint regarding the misappropriation of
equipment, and to assess internal controls over asset management.
• It was determined that any disposal of Port assets that did not follow AC-13 were of minimal value.
• While small opportunities for improvement were identified, it was concluded that most of the concerns
raised were without merit.
.
Operational Audit – Service Tunnel Renewal/Replacement Project:
The Committee received a presentation from Glenn Fernandes that included the following information:
• This audit was conducted to assess the quality of the port’s monitoring of this project to ensure project
management standards are being met.
• No issues were noted.
Information Technology Audit – Conducted in Non-public Session
Limited Contract Compliance Audit – McDonald’s USA, LLC:
The Committee received a presentation from Glenn Fernandes and management response from Jim Schone
and Dawn Hunter that included the following information:
• This audit was conducted to ensure that McDonald’s complied with the provisions of the Lease and
Concession agreement.
• One minor issue was reported, regarding non-product sales that were billed incorrectly by the Port.
PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES Page 3 of 3
THURSDAY, MAY 7, 2020
Audit Committee Minutes of May 7, 2020, submitted for review on September 18, 2020, and proposed for approval on September 24, 2020.
Adjournment:
There being no further business, the special meeting was adjourned 3:07 p.m.
Prepared: Attest:
Amy Dressler, Interim Commission Clerk Ryan Calkins, Audit Committee Chair
Minutes approved: September 24, 2020
