Commission Meeting Portal

Audit Meeting on Nov 03, 2009 1:00PM

Minutes for the Port Of Seattle Commission meeting, held on Nov 03, 2009 1:00PM

                        Commissioners                                               Tay Yoshitani 
                                                                                              Chief Executive Officer 
                      Bill Bryant 
                      Chair and President 
                   John Creighton                           P.O. Box 1209 
                     Patricia Davis                           Seattle, Washington 98111 
                   Lloyd Hara                             www. portseattle.org 
                   Gael Tarleton                              206.728.3000 

             An audio of the meeting proceedings and meeting materials are available on the Port of
                                        Seattle web site - 
                http://www.portseattle.org/about/organization/commission/commission.shtml 
                     APPROVED MINUTES 
            AUDIT COMMITTEE SPECIAL MEETING NOVEMBER 3, 2009 
            The Port of Seattle Commission Audit Committee met in a special meeting at 9:00 a.m.,
           Tuesday, November 3, 2009 in the Commission Chambers at Pier 69, 2711 Alaskan Way,
            Seattle, WA. Committee members Creighton, Hara and Miller were present, as well as
            CEO Tay Yoshitani and Joyce Kirangi, Port Internal Audit Manager. Commissioner
             Tarleton was also in attendance as an observer. 
        CALL TO ORDER 
            The committee special meeting was called to order at 9:07 a.m. by Commissioner Lloyd
            Hara. 
           Approval of Minutes 
            Motion for approval of the Minutes of September 1, 2009  Creighton 
            Motion carried by the following vote: 
            In Favor: Creighton, Hara (2) 
            Mr. Miller participates as a non-voting member of the Committee. 
           Note: As there was not a quorum for the October 6 meeting, it was not necessary to vote
             on official minutes. Notes were taken regarding discussions held on that date, however. 
          Internal Audit Report of Human Resources and Development (HR&D) Department 
            Presentation documents: Computer slide presentation from Joyce Kirangi, Director,
            Internal Audit Department and report titled, "Internal Audit Report  Human Resources
           and Development Audit" 

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        PORT COMMISSION MINUTES OF THE AUDIT COMMITTEE MEETING 
         TUESDAY, NOVEMBER 3, 2009                        P. 2 

             Presenters: Ms. Kirangi, Jack Hutchinson, Manger, Internal Audit, and Andy Medina,
             Senior Internal Auditor 
            Beginning the presentation, the HR&D Mission Statement was reviewed, which follows:
           "Human Resources & Development (HR&D) engages and equips employees to achieve
             exceptional results. We partner with others to sustain the Port of Seattle as a vital, high-
            performing organization." 
            Ms. Kirangi noted that the HR&D Department consists of approximately thirty FTE"s
            which have an assortment of responsibilities including employee hiring, benefits,
             compensation, consulting, diversity and training. 
             It was noted that the audit covered the 2-year period of 2007 through 2008 and that
             objectives of the audit included assuring that the department regularly performs risk
            assessments; that the department effectively monitors and maintains data regarding Other
            Post-Employment Benefits (OPEB); and that the Pier 69 Flex Pass program, the commute
             trip reduction program, is effectively monitored. 
            Ms. Kirangi stated that the department has an annual expense budget of approximately
            $3.5 Million and provided highlights on major areas of expense within the department,
             noting that as a service provider, the department"s greatest expenses are related to
             salaries/wages and benefits. 
             Ms. Kirangi stated that in general, this was a clean audit, and although no significant
             issues were noted as a result, areas were identified in which existing controls could be
            strengthened and these areas were communicated to management. It was suggested that
            the department have a more formal plan for looking at risk assessment issues, and Ms.
            Kirangi noted that this would be discussed further when Enterprise Risk Assessment as a
            whole throughout the organization was addressed. 
            Another area identified for strengthening was regarding maintaining data on employees
            who have retired and also on previous employees who are deceased. The final area
            mentioned was regarding the Flex Pass program, where it was suggested that
           management implement stronger controls over how many passes are purchased; how
             many are sold; and how many are left unsold at the end of the year. 
            Ms. Kirangi noted that the department has been proactive in addressing items brought to
              their attention as a result of the audit. 
            Rosalee Walz, Director, HR&D, stated her appreciation of the work done by the internal
             audit team, noting that the work has been taken seriously. She reiterated that a formal
            risk assessment plan would be implemented as part of the department"s 2010 work plan. 


                Nov 3 SCM Audit Min

        PORT COMMISSION MINUTES OF THE AUDIT COMMITTEE MEETING 
         TUESDAY, NOVEMBER 3, 2009                        P. 3 
            Commissioner Hara asked that a follow-up presentation be provided to the Audit
            Committee within the next 90 days in order to inform the Committee of any actions
            implemented in response to the audit. 
           Preliminary Discussion of 2010 Internal Audit Workplan 
            Presentation document: Computer slide presentation 
             Presenter: Ms. Kirangi 
            As introduction to discussion of the 2010 Workplan, Ms. Kirangi reviewed the status of
            projects which were a part of the 2009 Workplan, noting those which have been
            completed, those which are ongoing, and those still remaining. 
            Ms. Kirangi commented on the importance of continued communication with various
            departments, of listening to the CEO, and of listening to concerns of the Audit Committee
             regarding their concerns. She stated that the department will be doing some performance
             auditing as well as focusing on risk assessment, and she noted that there will be continued
             cycling of audits. Also noted was the need to conduct audits which add value to the
             organization by being proactive. 
            Ms. Kirangi stated that she would like to have further input from the Committee, as well
            as from management, regarding their areas of concern, as well as how they would like to
             see the department"s resources split in the conducting of future audits. She also
            commented that she would like to see further discussion of what is expected of the
            Internal Audit department regarding Enterprise Risk Management (ERM). 
             Dan Thomas, Chief Financial Officer, stated that although there is a great deal of
            Enterprise Risk Management taking place throughout the organization, there has not
            really been a formal framework used. He noted that part of the issue was a lack of
            understanding of what a true ERM is and what the final work product would look like.
            He also stated that Mr. Miller had shared with him the COSO framework for ERM. He
            said that an ERM framework would likely be applied as a pilot program and then be
            brought back to the Committee for review. 
            Mr. Miller suggested that as there will be a new Audit Committee as of January, 2010, it
            would be important for them to discuss their views on where they think the function
             should be in another five years in order to help facilitate the team as far as where it wants
             to be as far as general concepts and allocating priorities. 
            Mr. Miller commented that it would be a good idea for the department to be fully up to
            date on lease issues that had been reviewed by the State Auditor"s Office (SAO), not
            necessarily to duplicate any efforts, but to have appropriate information should the SAO
             look into the Port"s leases again next year. 


                Nov 3 SCM Audit Min

        PORT COMMISSION MINUTES OF THE AUDIT COMMITTEE MEETING 
         TUESDAY, NOVEMBER 3, 2009                        P. 4 
            Mr. Miller encouraged staff to provide management with language for leases and what
            information should be included going forward. Mr. Yoshitani mentioned another option,
            which would be to provide "boilerplate" language to an outside attorney for review and
           comment. 
            Following discussion of this year"s Voluntary Separation Program (VSP), Mr. Miller
             commented on the significance of the risk factor when there is significant organizational
             change, noting that this would be a good area to look at. 
            Tom Barnard, Policy Analyst suggested to the Committee that an adequate length of time
            be allowed for the Audit Department to prepare their reports to the Committee. 
       ADJOURNMENT 
            There being no further business, the meeting was adjourned at 10:55 a.m. 

           Lloyd Hara 
           Commissioner 











                Nov 3 SCM Audit Min