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

APPROVED MINUTES 
AUDIT COMMITTEE SPECIAL MEETING NOVEMBER 4, 2008 
The Port of Seattle Commission Audit Committee met in a special meeting at 9:00 a.m.,
Tuesday, November 4, 2008 in the Commission Chambers at Pier 69, 2711 Alaskan Way,
Seattle, WA. Commissioners Hara and Tarleton were present, as well as citizen committee
member Steve Miller. Also in attendance was CEO Tay Yoshitani and Joyce Kirangi, Port
Internal Audit Manager. 
CALL TO ORDER 
The committee special meeting was called to order at 9:05 a.m. by Commissioner Lloyd
Hara. 
Approval of Minutes  None. 
Moss Adams Letter of Recommendations  Action Plan Status Report 
Presenter: Rudy Caluza, Director, Accounting and Financial Reporting 
To provide context, Mr. Caluza provided background information on the focuses of the Moss 
Adams audits of the Port, including auditing of financial statements as well as of federal
grants that are administered, and also passenger facility charge revenues. A document was
provided to, and reviewed for the Committee reflecting the status of actions in response to
recommendations received as a result of the latest Moss Adams audit.
Regarding actions still in process, which relate to the new CPO-1 Policy, Commissioner Hara
suggested that when the actions were complete, Nora Huey, Director, Central Procurement
Office, return to the audit committee for further descriptions of actions taken. 
Internal Audit Department Briefing 
Presenters: Joyce Kirangi and Jack Hutchinson, Senior Internal Auditor 
Aviation Maintenance Department Accountability Audit - 2007 

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MINUTES OF AUDIT COMMITTEE MEETING 
TUESDAY, NOVEMBER 4, 2008                        P. 2 
Ms. Kirangi reported on findings and recommendations resulting from the internal audit of
the Aviation Maintenance Department from 2007 as follows: 
Inadequate Inventory Policies 
Inadequate Controls Regarding Accountability for Tools and Equipment 
Inadequate Management Oversight on Reimbursables 
Inadequate Management Oversight on Direct Purchases 
Inadequate Controls Over Procurement 
During their presentation, Ms. Kirangi and Mr. Hutchinson discussed the recommendations
provided to the Maintenance Department resulting from the audit, and reviewed all
recommendations associated with the findings. 
A report was provided for the Committee's review regarding the Maintenance Department
audit. 
Following the presentation, Michael Feldman, Deputy Managing Director, Aviation
Division, Facilities and Environmental and John Christianson, General Manager, Aviation
Maintenance provided to the Committee their comments regarding action plans to be
implemented as a result of the audit findings and recommendations. 
Commissioner Hara noted that he may wish to have someone from the Maintenance
Department return in the future in order to review progress made on their action plans. 
Lease and Compliance Audit  ATZ, Inc. (dba Doug Fox and Airstar Parking) 
Findings resulting from the Internal Audit of Doug Fox Parking, were presented as follows: 
Under-reported Concessions Due to Disallowed Deductions 
Penalty/Interest on Overdue Payment 
A report was provided for the Committee's review regarding the audit of Doug Fox and
Airstar Parking. Recommendations as a result of the audit findings were presented to the
Committee, with discussion following. 
Ms. Kirangi stated that due to the responses to the findings for Doug Fox, this audit was
considered closed. 
Discussion of 2009 Workplan 
Ms. Kirangi outlined the sections regarding the internal audit approach to the annual risk
assessment and the 2009 workplan. The sections include: 
Central Processing Systems 
Lease and Concessions 

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MINUTES OF AUDIT COMMITTEE MEETING 
TUESDAY, NOVEMBER 4, 2008                        P. 3 
Third Party Management 
Financial Reporting / General Ledger 
Special Investigations 
Departmental Accountability and Compliance 
Federal Assistance (Single Audit) 
Performance / Operational Effectiveness 
Enterprise Risk Management 
Capital Improvement 
Ms. Kirangi commented that the Internal Audit Department approach is to visit various
departments approximately every two years. 
Status Report to TKW Audit by Office of Social Responsibility  ITEM WITHDRAWN 
Enterprise Risk Management (ERM) Discussion 
Presenters: Dan Thomas, Chief Financial Officer and Jeff Hollingsworth, Risk Manager 
Mr. Thomas commented that in response to the Audit Committee's desires, the Port's
Executive management staff has discussed the need for the elevation of enterprise risk
management to a more strategic level within the organization. He noted that it would be
appropriate to establish a common language within the Port as to a framework and
description of Enterprise Risk Management. 
Mr. Hollingsworth provided background on the importance of organizations relating to the
idea of Enterprise Risk Management, and noted the importance of having a common
language within the organization regarding the definition of Enterprise Risk Management. 
Mr. Hollingsworth noted that ERM can be a stand-alone initiative; can be a process to
support an organizational strategy; and can be applied at a departmental level, a divisional
level, or a Port-wide level. Also reviewed were the benefits of ERM in general, and where
the Port currently stands with Enterprise Risk Management. 
Commissioner Tarleton suggested that in the near future, the full Commission would
appreciate a discussion of Enterprise Risk Management. 
Committee member Miller noted that it would be appropriate for management to come back
to report on risk management/risk assessment activities. He also recommended that Ms.
Kirangi include in her future work, a focus on risk management to help support and identify
best practices in that area. 
CEO Yoshitani commented that due to the nature of Port business, the best thing to do was to
identify areas which need to be identified for risk management, and focus on those areas; 
identifying which areas are most at risk and begin to address them on a priority basis. 

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MINUTES OF AUDIT COMMITTEE MEETING 
TUESDAY, NOVEMBER 4, 2008                        P. 4 
Insurance Issues at Marinas / Fishermen's Terminal 
Presenters: Darlene Robertson, Director, Harbor Services, Real Estate Division and Jeff
Hollingsworth, Risk Manager 
Mr. Hollingsworth commented on the background of the presentation, stating that during the
past several years, the Risk Management group has been working with the Harbor Services
group regarding the issue of whether or not to mandate vessel liability insurance for moorage
agreements at all Port marinas. 
Mr. Hollingsworth reviewed current policies for insurance at Port marinas, and commented
that current Washington state regulations do not mandate vessel insurance. He stated that
after reviewing the current Port policy, staff recommended that the policy be updated to
require vessels to have liability insurance. 
Commissioner Tarleton stated that the policy needs to be implemented consistently and fairly
and that she does not want to see a policy implemented that will put people out of business. 
Ms. Robertson noted that staff had done a survey of both public and private marinas and that
most are currently requiring vessels to carry liability insurance. 
Discussion of Draft Audit Committee Work Plan for 2009 
Mr. Miller provided a document to the committee to help guide the discussion of possible
goals for work to be done over the upcoming three years. He commented that he would like
to see a continuance of reports brought to the committee on risk assessments of various
departments. He also suggested integrating the Internal Audit Work Plan to start to think
about performance audits, and that perhaps the first few performance audits should focus on
risk assessment and risk management. 
Departments suggested as areas of focus included Finance, Port-wide leasing operations,
Human Resources and Development, and Legal. 
Commissioner Hara suggested that initially, perhaps 25% of the Internal Audit work could
focus on performance audits, increasing to 40% by 2011, and 60% by 2013. He also
suggested moving away from the compliance-type audits, as those were performed by Moss
Adams, as well as the State Auditor's Office. 
Commissioner Tarleton agreed that more time be allocated in the future to performance
auditing. She also agreed with Mr. Miller's recommendation that a risk assessment of
Information and Communication Technology systems be completed in 2010. Commissioner
Tarleton also suggested that an annual report be prepared by the Internal Auditor to be
provided to the Audit Committee and the CEO, regarding actions which were undertaken and
the findings. 


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MINUTES OF AUDIT COMMITTEE MEETING 
TUESDAY, NOVEMBER 4, 2008                        P. 5 
Dan Thomas, CFO, commented that his concerns included resource and timing issues of
audits, as the issue of having multiple audits taking place at the same time requires a great
deal of staff time. 
Mr. Miller reiterated that the suggested concept would be to work with one cross-cutting
processing system and one operational function Commissioner Tarleton stated she would like
to zero in, by the end of the year, on the two cross-cutting areas to be reviewed. 
Commissioner Hara asked that by the Committee and staff review Mr. Miller's document and
provide input and suggestions, and stated that he would like to see the work plan wrapped up
by the next Audit Committee meeting. 
ADJOURNMENT 
There being no further business, the meeting was adjourned at 11:16 a.m. 

Lloyd Hara 












Nov 4 SCM Audit Min