Internal Audit Briefing 

Presented to the Port of Seattle 
Audit Committee and Tay Yoshitani, CEO 

Joyce Kirangi, CPA 
Director, Internal Audit 
February 5, 2013

Agenda 
Audit Report 
1.  Lease and Concession Audits 
Concessions International 
. 
2.  Operational Audits 
Central Processing System 
None 
Comprehensive Operational Audit 
None 
Limited Operational Audit 
None 
3rd Party Audit 
World Trade Center (WTC)  Seattle 
Briefing/Updates 
1.  Peer Review Follow-Up Action Items

Lease and Concession Audit 
Concessions International 

Background 
Concessions International operates seven retail locations at the airport.
Under the terms of the agreement with the Port, the lessee agreed to pay a
Minimum Annual Guarantee (MAG) or percentage fees on their gross
receipts generated at the airport. The percentage concession fees range
from 10% on branded food and beverage up to 26.5% on souvenirs. 
2009        2010        2011       2012 
Food & Beverage          $964,664    $1,083,771   $1,084,950  $1,115,790
Liquor                   $139,122     $ 164,146    $200,633   $193,301 
Source: PeopleSoft

Lease and Concession Audit 
Concessions International 

Audit Objectives 
The purpose of the audit was to determine whether: 
1.   The reported concession fees were complete, properly calculated, and
remitted timely to the Port. 
2.  The Port and the lessee complied with significant provisions of the
Lease and Concession Agreement. 
We examined the books and records of Concessions International for a
period of thirty-six months from January 1, 2009, through December 31, 2011.

Lease and Concession Audit 
Concessions International 

Audit Result 
No Findings

Operational Audit 
Third-Party Management Services Agreement for 
World Trade Center (WTC) - Seattle 
Background 
The Port of Seattle owns the World Trade Center Seattle (WTCS). The Facility
was developed under the Washington State authority of RCW 53.29  Trade
Center Act. The primary objective of the Facility is to foster international
trade and commerce and to expose Seattle to international trade. 
The Port has outsourced the day-to-day management of the WTCS to
Columbia Hospitality Inc. (CHI), including sales, marketing, member services,
etc. 
The Port is responsible for all operating costs for the Facility, including
management and incentive fees to CHI.

Operational Audit 
Third-Party Management Services Agreement for 
World Trade Center (WTC) - Seattle 
Audit Objectives 
The purpose of the audit was to determine whether: 
1.   Port management monitoring controls are adequate to ensure: 
Billings are complete and accurate 
Expenses are proper and in accordance with the agreement terms and
conditions 
2.  Columbia Hospitality, Inc. (CHI) complied with the agreement terms and
conditions, as amended, related to : 
Revenues 
Expenses 
We reviewed information for the period January 1, 2010, through December
31, 2011.

Operational Audit 
Third-Party Management Services Agreement for 
World Trade Center (WTC) - Seattle 
Highlights and Accomplishments 
CHI submits a detailed annual budget for the Port's approval. The budget
includes monthly budgeted amounts by detailed categories of revenue
and expense types and the details of assumptions used in preparing the
budget expenses. 
On a monthly basis, representatives from the Port's Real Estate and
Seaport Finance & Budget departments meet with CHI management to
review marketing and financial reports and activities. These reports
include, among other items: 
Analysis of forecasted operating performance for two quarters and the fiscal year 
A summary line item review of revenue & expenses vs. budgeted and an explanation
of the variances; Port management approves the explanations provided 
Approval of monthly expenses by the responsible Port management 
A listing of monthly expenses from which a sample is selected for detailed review by
the responsible Port management

Comprehensive Operational Audit 
Third-Party Administration of Self-Insured Medical and Dental 

Audit Result 
No Findings

Briefing/Updates 


Peer Review Follow-Up Action Items