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INTERNAL AUDIT REPORT
Limited Contract Compliance Audit
Stellar Bambuza SEA, LLC
January 2023 – June 2023
Issue Date: June 5, 2024
Report No. 2024-07
Stellar Bambuza SEA, LLC
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TABLE OF CONTENTS
Executive Summary .............................................................................................................................................. 3
Responsible Management Team ........................................................................................................................ 3
Background ............................................................................................................................................................ 4
Audit Scope and Methodology ............................................................................................................................ 5
Appendix A: Risk Ratings..................................................................................................................................... 6
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Executive Summary
Internal Audit (IA) completed an audit of the Lease and Concession Agreement (Agreement) between
Stellar Bambuza Sea, LLC and the Port of Seattle (Port).
The period audited was January 1, 2023, through June 30, 2023. The audit was performed to determine
whether concession fees were complete, properly calculated, and remitted timely to the Port.
Stellar Bambuza Sea, LLC operates the Swarovski storefront, the Seattle Made storefront and the New
Stand, a combined coffee, bakery, and convenience storefront.
During our audit, we identified no exceptions to our performed procedures.
We extend our appreciation to management and staff of the Airport Dining and Retail, and the
Accounting & Financial Reporting (AFR) Departments for their assistance and cooperation during the
audit.
Glenn Fernandes, CPA
Director, Internal Audit
Responsible Management Team
Lisa Lam, Acting Director, Accounting and Financial Reporting
Khalia Moore, Senior Manager, Airport Dining and Retail
Jeff Wolf, Director, Aviation Commercial Management
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Background
On October 4th, 2017, The Port of Seattle (Port) entered into a lease agreement (AIR002240) with
Stellar Bambuza Sea, LLC.
Percentage fees were due in arrears, to the extent the percentage fees were higher than the monthly
MAG (Minimum Annual Guarantee) which is paid in advance. Effective January 1, 2023, only the
percentage fee payments are made since MAG is not considered until the end of the lease year. The
MAG in 2023 was $1,667,688.09.
Percentage Fees are:
16% of annual gross sales less than $8,000,000
18% of annual gross sales between $8,000,000 - $9,000,000
20% of annual gross sales greater than $8,000,000
The table below reflects 2021, 2022, and 2023 Gross Sales and Percentage Fees:
Year
Gross Sales
Percentage Fees
2021
$9,735,213
2022
11,509,930
2023
9,955,545
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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 January 2023 through July 2023 and included the following procedures:
Concession Fees Completeness, Accuracy, and Timeliness
• Validated that the percentage fees for non-specialty and specialty categories were calculated
correctly and in accordance with the lease revenue thresholds.
• Agreed Concessionaire’s monthly general ledger sales data to what was provided to the
Accounting & Financial Reporting (AFR) Department.
• Agreed point of sale summary reports to the general ledger.
• Obtained the audited Schedules of Gross Sales Report, the Independent Certified Public
Accountant, and compared the report to year-end gross sales data reported to AFR.
• Reviewed the Profit & Loss statements for variances.
• Reviewed a random sample of invoices to determine if they were paid on time and for the full
amount charged.
• Validated that concessionaire is certified through OMWBE WA and confirmed with management
that they are reflected as such on the ACDBE participation report submitted to the FAA.
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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
Financial
Stewardship
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