Template revised April 12, 2018.
COMMISSION
AGENDA MEMORANDUM
Item No.
11b
BRIEFING ITEM
Date of Meeting
February 13, 2024
DATE: February 7, 2024
TO: Stephen P. Metruck, Executive Director
FROM: Glenn Fernandes, Director, Internal Audit
SUBJECT: 2023 Internal Audit Annual Report
EXECUTIVE SUMMARY
The purpose of this memo is to brief the Commission and the public on audits performed in the
2023 calendar year. The 2023 Audit Plan was approved at the December 8, 2022, Audit
Committee meeting.
Internal Audit (IA) has completed 16 audits and identified 4 High Risk, 16 Medium Risk, and 7
Low Risk issues for management action. In addition, R.L. Townsend & Associates, an external,
independent auditor, who was engaged to audit General Contractor/Construction Manager
(GC/CM) construction projects, presented an Annual Audit Services Report at the December 14,
2023, Audit Committee meeting. At the September 7, 2023, Non-Public session of the Audit
Committee, IA presented a summary report of the Criminal Justice Information Systems (CJIS)
Technical Audit, which was performed by the Washington State Patrol.
Implementation of the associated recommendations from audits, will strengthen internal
controls, enhance processes, and improve efficiencies. Internal Audit has a process in place
where we periodically follow up on recommendations and agreed upon management action
plans to assure action is taken. This process also relies on attestations from Management.
Delinquent action plans are periodically brought to the Audit Committee’s attention.
BACKGROUND
On December 11, 2007, the Port of Seattle (Port) Commission passed a motion, which resulted
in the creation of an independent and objective Internal Audit function. In discharging their
duties, the Internal Audit Director and his staff are accountable to the Audit Committee and to
the Executive Director.
The Audit Committee serves as an arm of the Port Commission. For 2023, Commissioner
Mohamed chaired the Audit Committee, and Commissioner Cho served as the other
commission member. Ms. Sarah Holmstrom, CPA, and a Finance Leader for Amazon
Advertising, served as the external volunteer member of the Audit Committee.
COMMISSION AGENDA – Briefing Item No. 11b Page 2 of 3
Meeting Date: February 13, 2024
Template revised September 22, 2016.
Internal Audit conducts independent, objective, risk-based audits of the Port’s operations,
technology, activities, and vendors. Our audits add value by helping the Port achieve its mission
and contribute to: financial stewardship, accountability, transparency, governance, and
operational excellence. Internal Audit derives its authority from the Port Commission.
LISTING OF COMPLETED 2023 INTERNAL AUDITS
Below is a list of audits completed by Internal Audit in 2023. These audits are categorized by
audit type.
Performance:
1) Port-wide Payroll Controls
2) Airport Parking Garage
3) Social and Environmental Reporting
4) Fishermen’s Terminal
5) Police Department Seizures and Evidence Room
Performance - Capital:
6) Supply Chain Disruption Management
7) Terminal 5 Berth Modernization Project
8) C Concourse Expansion (Pre-construction) GC/CM
1
9) Main Terminal Low Voltage System Upgrade GC/CM
1
10) T-117 Sites 23-25 Restoration Construction Project GC/CM
1
Information Technology:
11) Email and Web Browser Protections (ICT & Aviation Maintenance)
2
12) Network Infrastructure Management (Aviation Maintenance)
2
13) Security Awareness and Skills Training
2
Limited Contract Compliance:
14) Louis Dreyfus Company Washington LLC
15) Seattle Air Ventures
16) ATZ, Inc. dba Doug Fox Parking
1.
RCW 39.10.385 requires an independent audit, paid for by the public body, to confirm the proper
accrual of costs, for GC/CM projects. This audit work is performed by external, independent auditors
through Service Agreements. A year-end status report is provided at the December Audit Committee.
Internal Audit also performs periodic audits of these projects and reviews areas that are not looked at
by the independent auditors. Internal Audit issues an audit report on areas covered.
2.
Security Sensitive – Exempt from public disclosure per RCW 42.56.420; these will not be discussed
during this Commission meeting.
COMMISSION AGENDA – Briefing Item No. 11b Page 3 of 3
Meeting Date: February 13, 2024
Template revised September 22, 2016.
ATTACHMENTS TO THIS BRIEFING
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
January 24, 2023 – The Commission was briefed on 2022 completed audits.
December 9, 2021 – The Commission was briefed on 2021 completed audits.
December 8, 2020 – The Commission was briefed on 2020 completed audits.
December 10, 2019 – The Commission was briefed on 2019 completed audits.
