Audit Committee Minutes of September 24, 2020, submitted for review on December 4, 2020, and proposed for approval on December 10,

2020.

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 Policy Manager; Michelle Hart, Commission Clerk; and Lauren

Smith, Deputy Commission Clerk.

Call to Order:

The committee special meeting was called to order at 1:39 p.m. by Commissioner Calkins.

Approval of Audit Committee Meeting Minutes of May 7, 2020 and June 11, 2020:

Ms. Maddie Frost-Shaffer that contained the following information:

• Introduction of the overall scope of the audit the Washington State Auditor’s Office (SAO) will conduct

for the year 2019;

• While the scope has not been fully identified, as they are very early in the process, the office will

continue communication about the final determined scope.

• This year’s audit will be conducted remotely due to Covid-19.

• As part of the accountability audit the SAO investigates management’s use and safeguarding of

public resources, as well as compliance with laws and policies.

• Due to objectives, the SAO may cover audits already done but with a different approach.

• Three levels of reporting, findings, management letters, and exit items.

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• One frozen position that had been vacant within the Internal Audit department; and

• cutting costs through not traveling and participating in some training; however, staff is still maintaining

training needed to keep up with required licenses.

Committee members remarked on the department’s ability to meet the challenge of the moment regarding

the budget while still maintaining the essential function of internal audit and its importance to maintaining

transparency.

Without objection, the proposed 2021 Internal Audit budget was approved.

have changed; and

• updates do not change any roles or responsibilities - changes to the charter are mostly to clean up

the document and clarify tittles and technical terms.

Without objection, the updated Internal Audit Department charter was approved.

Updates and Approvals:

The committee received a presentation from Mr. Glenn Fernandes that included the following information:

• Overviewed changes to the audit plan for 2020 - all changes are due to the Pandemic and were

covered in-depth and approved at the June 11 audit committee meeting;

• High level review of deferred audits and which audit reports can be expected at the December Audit

Committee meeting;

• Compiling list of potential 2021 audits - first added were audits deferred from 2020;

• Commissioner Bowman added a request relating to noise monitoring data;

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• Rent deferrals as a result of Covid-19 - not as much is known about what this will look like, but it is

on the radar of Internal Audit;

• Planned audits for 2021 will be reviewed at the December Audit Committee meeting;

• Committee members inquired about potential audits for the future and if they are within the scope of

the internal audit team;

Mr. Fernandes and his team.

Operational Audit – AOA Perimeter Fence Line Standards Project:

The Committee received a presentation from Mr. Glenn Fernandes and Mr. Spencer Bright that included the

following information:

• The project was authorized in June 2017 and was selected because of the number of associated

change orders and the project not hitting its original substantial completion date;

• The project is about a year behind schedule;

• This is an Important project, as it is a security fence around the perimeter;

• The objective of the audit;

• Mistakes included using an in-house designer team, in which there were eight change orders

resulting in monetary and time loss;

• Commissioner Bowman raised questions about why new contractors struggle to comply with Port

contracting procedures and asked staff to identify what could make it easier going forward;

• Commissioner Bowman opined that issues occurring in this project are widespread within Port

projects;

• Ms. Janice Zahn provided management response information regarding the complexities of this

specific project and an overview of how the Port provided support to the contractor, as well as lessons

learned; and

• Ms. Zahn also indicated that this project had 40 days of delay due to Covid-19, as workers must work

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• Mr. Fernandes noted that going forward an audit such as this will be conducted in-house, as one of

their team members completed and passed the training and testing to be a qualified security

assessor.

Limited Contract Compliance Audit – E-Z Rent A Car, Incorporated:

The Committee received a presentation from Mr. Glenn Fernandes and a management response from

Mr. Geoffrey Foster that included the following information:

• E-Z Rent A Car has been located at the airport for ten years, with consistent revenues up until the

pandemic;

• The company recently filed for Chapter 11 bankruptcy;

to the Port;

Limited Contract Compliance Audit – Concourse Concessions, LLC:

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