Commissioners Present: Benye Weber

Others Present: Jim Patton (Executive Director), Molly MacLeod-Roberts (Edwards & Associates), Tom Baenen (GFMG President) Long Bechard (Harbormaster), Tiffany Lindsay (State Auditor's Office) and Jayne Bentler (State Auditor's Office).

Call to Order: The meeting was called to order at 4:13 p.m. by Commissioner Weber in the Port Office, located at 24 Front Street in Coupeville, WA. Weber declared that, due to the presence of only one Commissioner and the lack of a quorum, no decisions could be made and action would be limited to welcoming the auditors and learning their procedures and requirements.

PURPOSE OF THE MEETING:

The purpose of the Special Meeting was to hold an Entrance Conference with representatives of the Washington State Auditor's Office who will conduct the three-year accounting audit of the Port.

Weber noted that the meeting was advertised in the legal section of the newspaper. The public was notified and invited to this meeting, but there would not be an opportunity for public input.

Introduction of the auditors: (Patton) Patton introduced Jayne Bentler, the Assistant Audit Manager of the State Auditor's Office. Bentler said she would be supervising the work of Tiffany Lindsay, the Assistant State Auditor.

Explanation of the rules of the audit and the accounting areas to be audited: (Bentler) Bentler provided all present with the Washington State Auditor's Office Entrance Conference handout for the Port of Coupeville (January 1, 2004 - December 31, 2006), which is attached to these Minutes with Lindsay's letter explaining the purpose of this meeting dated November 28, 2007.

Bentler thanked everyone for coming and provided additional explanations as she went over the handout. She said she was really glad to know that Patton had met Nestor Newman, the former Audit Manager who was, until recently, responsible for auditing all of Washington's Port Districts. Patton said Newman had been very helpful with advice on a number of Port issues including the need to clarify the Port's legal authority to place development rights at the Greenbank Farm into a Conservation Easement. Patton asked Bentler to thank Newman on behalf of the Port.

Bentler explained that although the accountability audit is for January 2004 through December 2006, it would not just stop then. The State Auditor's Office also looks at internal controls that are currently in place. She said Lindsay will specifically be looking at who processes payroll and disbursements, how that is done, who authorizes disbursements, and who pays them. They want to make sure there are good safeguards in place for the accountability of public assets. Bentler said they use a risk-based approach and would not be looking at everything.

Patton introduced Long Bechard and explained that, as Harbormaster, Bechard is the only person to actually handle cash. Patton then explained the deposit process Bechard follows for the money received for fuel sales and moorage.

Bentler said they were not doing an audit of financial statements. They will be looking at accountability for public resources and compliance with state laws and regulations. This is called a legal compliance audit.

She noted that there were no citizen's concerns to investigate at this audit, and that the Port's prior audit three years ago was clean.

Bentler asked about any contracts the Port had other than Patton's contract to provide management services as the Port's Executive Director. Weber said there is a recorded legal agreement with the Greenbank Farm Management Group for their management fee, and verbal agreements with the Port handyman, the Harbormaster and the Dock Hand. Bentler recommended that the Port should have some kind of an authorization paper or Personnel Action Form that simply states this person will get paid this amount. Patton said he would have those forms prepared before the end of the audit and he provided a copy of his contract to Lindsay

Bentler asked what small and attractive assets the Port had, and she asked if the Port has a listing of those items. Patton said they did not, but he said he would prepare an inventory of pilferable items such as the office computer, the wharf dinghy and absorbent boom containers prior to the end of the audit. Bentler said that the listing needs to be such that the Port can safeguard the things that are of value and conduct regular inventories.

Bentler said that because the Audit Manager would be out of the office until the end of December, it is unlikely the State Auditor's Office will release the Port's Audit Report in December. She said it will probably be released in early January. Bentler said the Audit Budget was for 42 hours of work, plus travel.

Bentler said the handout she had provided was incorrect on one point and they would not need to submit an attorney's letter for the audit. The State Auditor's Office does need to have a Management Responsibility Letter. Lindsay said that tomorrow she would provide the template to Patton which would then need to be put on Port of Coupeville letterhead. The letter would then need to be jointly signed by Patton as Executive Director and Charles Edwards as Port Accountant.

Patton said the Port Office, the Harbormaster's office and the conference room at Edwards and Associates were available for Lindsay to work in throughout the week.

Bentler asked if they had any other questions and Patton and Weber said they did not. Bentler added that the State Auditor's Office needed a copy of the lease agreement with the Greenbank Farm Management Group for their permanent file. Patton said he would provide that to Lindsay.

ADJOURNMENT: There being no further business, Weber adjourned the meeting at 5:05 p.m.