INTERNAL AUDIT REPORT
Limited Contract Compliance Audit
ATZ, Inc. dba Doug Fox Parking
July 2019 – June 2022
Issue Date: May 30, 2023
Report No. 2023-07
ATZ Inc. dba Doug Fox Parking
July 2019 – June 2022
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TABLE OF CONTENTS
Executive Summary ................................................................................................................................................ 3
Background ............................................................................................................................................................. 4
Audit Scope and Methodology ............................................................................................................................... 5
Appendix A: Risk Ratings ....................................................................................................................................... 6
ATZ Inc. dba Doug Fox Parking
July 2019 – June 2022
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Executive Summary
Internal Audit (IA) completed an audit of the Lease and Concession Agreement (Agreement) between
ATZ Inc. dba Doug Fox Parking (Doug Fox) and the Port of Seattle (Port). The period audited was July
1, 2019, through June 30, 2022. The audit was performed to determine whether Doug Fox reported
Concession Fees were complete, properly calculated, and remitted timely to the Port.
We concluded that Doug Fox had materially complied with the terms of Agreement, specifically that
concession fees were accurate, complete, and remitted timely to the Port. No issues were identified
requiring a management response.
Through their reconciliation process, Doug Fox identified $633 in cancellation fees that were over
reported in January and March of 2020. Although the amount identified was nominal, the associated
credit back to Doug Fox, had not been processed because of various factors including COVID-19. After
being identified by this audit, the Port processed and applied the necessary credit to Doug Fox’s
account.
We extend our appreciation to management and staff of the Aviation Commercial Management and
Accounting & Financial Reporting (AFR) Departments for their assistance and cooperation during the
audit.
Glenn Fernandes, CPA
Director, Internal Audit
Responsible Management Team
Rudy Caluza, Director, Accounting and Financial Reporting
Lisa Lam, Assistant Director, Accounting and Financial Reporting
Geoff Foster, Aviation Property Manager
Lance Lyttle, Managing Director Aviation
Jeff Wolf, Senior Manager, Aviation Business Development
ATZ Inc. dba Doug Fox Parking
July 2019 – June 2022
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Background
ATZ Inc. dba Doug Fox Parking (Doug Fox) is the closest parking lot to Sea-Tac Airport that offers fully
attended and secure parking 24 hours a day. The Port of Seattle (Port) entered into a Lease and
Concession Agreeement (Agreement) with Doug Fox on July 30, 2013.
Per the Agreement and applicable amendment(s), Doug Fox is required to pay a Minimum Annual
Guarantee (MAG) of $2,000,000 during the extension term, in equal monthly payments payable on or
before the first day of each month equating to approximately $166,666.67. However, as a result of the
COVID-19 pandemic, the Exceptional Circumstances provision within the Agreement was amended.
Effective April 1, 2021, if the total numbers of enplaned passengers for any calendar month decreases
by more than 20% percent from the same month of the prior year, MAG payment due for the next month
shall automatically be adjusted downward.
The Agreement also requires a Percentage Fee equal to 58% of gross revenues, provided the fee is
higher than the monthly MAG. The Percentage Fee decreases to 45%, 30%, 10%, and 10%,
respectively, for each of the four months comprising the Lessee Winding Down Period as well. As
mentioned above, the MAG is payable in advance, on or before the first day of each month. On the other
hand, the Percentage Fee, if applicable, is due within 10 days of the invoice due date. Otherwise, a late
fee of 5% is imposed on the outstanding balance after the 10
th
day.
The table below reflects the Gross Revenues and Percentage Fees billed:
Agreement Year
Gross Revenue ($)
Percentage Fees ($)
July 2019 - June 2020
4,533,893
2,289,045
July 2020 - June 2021
2,945,118
1,496,000
July 2021 - June 2022
7,083,293
2,843,024
Source: Doug Fox Monthly P&L Reports, Peoplesoft Financials, and AFR documents
ATZ Inc. dba Doug Fox Parking
July 2019 – June 2022
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Audit Scope and Methodology
We conducted the engagement 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 conduct an engagement to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our engagement objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and conclusions based on our
engagement objectives.
The period audited was July 2019 through June 2022 and included the following procedures:
Concession Fees Completeness, Accuracy, and Timeliness
• Reviewed relevant documents (e.g., Commission Records, CRRSAA Grant Agreements, Port’s
Rent Deferral Program, Billing Adjustment Worksheets, etc.) to gain an understanding of the
changes to the requirements for MAG and Percentage Fee payments as a result of the COVID-
19 pandemic.
• Tested the tenant’s billing and payments for all months in the audit period to determine whether
MAG payments and percentage fees were billed and paid completely, accurately, and timely.
• Inspected and reviewed the Tenant’s monthly P&L reports to determine whether any other
income line items should be included within concessionable revenue.
• Agreed revenues reported to the Port to the Tenant’s monthly P&L reports.
• Traced concession payments to Port records to verify payments were received timely and if not,
late fees were assessed appropriately.
ATZ Inc. dba Doug Fox Parking
July 2019 – June 2022
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Appendix A: Risk Ratings
Findings identified during the audit are assigned a risk rating, as outlined in the table below. Only one
of the criteria needs to be met for a finding to be rated High, Medium, or Low. Findings rated Low will
be evaluated and may or may not be reflected in the final report.
Rating
Internal
Controls
Compliance Public
Commission/
Management
High Significant
Missing or not
followed
Non-compliance
with Laws, Port
Policies,
Contracts
High probability
for external audit
issues and / or
negative public
perception
Requires
immediate
attention
Medium Moderate
Partial controls
Not functioning
effectively
Partial
compliance with
Laws, Port
Policies
Contracts
Moderate
probability for
external audit
issues and / or
negative public
perception
Requires
attention
Low Minimal
Functioning as
intended but
could be
enhanced
Mostly complies
with Laws, Port
Policies,
Contracts
Low probability
for external audit
issues and/or
negative public
perception
Does not
require
immediate
attention