Commissioners                                             Tay Yoshitani 
Bill Bryant 
Chief Executive Officer 
Commission President 
Tom Albro                          P.O. Box 1209 
John Creighton                    Seattle, Washington 98111 
Rob Holland                       www.portseattle.org 
Gael Tarleton                          206.787.3000 

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 June 7, 2011 
The Port of Seattle Commission Audit Committee met in a special meeting Tuesday, June 7, 2011, 
in the Commission Chambers at Pier 69, 2711 Alaskan Way, Seattle, Washington. Committee
members Commissioner Albro, Commissioner Holland, and Christina Gehrke were present, as well
as Tay Yoshitani, Chief Executive Officer; Joyce Kirangi, Internal Audit Department Director; Rudy
Caluza, Accounting and Financial Reporting Director; Jack Hutchinson, Internal Audit Manager; Bill
Fovargue, Internal Auditor; Tom Barnard, Research and Policy Analyst; and Paul White, 
Commission Records Coordinator. 
Commissioner Albro participated by telephone. 
CALL TO ORDER 
The committee special meeting was called to order at 9:27 a.m. by Commissioner Holland. 
Public Comment: 
None. 
Approval of Audit Committee Meeting Minutes of May 3, 2011: 
On motion by Commissioner Albro, seconded by Commissioner Holland, the minutes of the
Audit Committee Special Meeting of May 3, 2011, were approved. 
Approval of Audit Committee Meeting Minutes of April 5, 2011, as Amended: 
On motion by Commissioner Albro, seconded by Commissioner Holland, the minutes of the
Audit Committee Special Meeting of April 5, 2011, were amended to reflect correct staff
attendance on April 5, 2011, and the correct previous meeting date of February 1, 2011, and
were approved, as amended. 
Without objection, the Committee advanced to consideration of 



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TUESDAY, JUNE 7, 2011 
Operational Audit Seattle-Tacoma International Airport Lost and Found: 
Ms. Kirangi described the operational audit of the Airport's lost and found services, noting the
program is an example of a third-party partnership and is operated currently by the YWCA, who
sent representatives to the Committee meeting today. She referred the Committee to the
information in the audit report, which noted that information relating to calendar years 2008, 2009,
and 2010 was reviewed, including fieldwork activity that concluded in May 2011. Ms Kirangi stated
that no findings resulted from the audit. 
Commissioner Albro requested additional information regarding lost items released to authorities
and items destroyed. In response, Ms. Kirangi highlighted the variety of items processed through
lost and found. Mr. Hutchinson described some items that might be destroyed after a reasonable
period of time or that are not suitable for donation. He agreed to provide additional information
related to items destroyed or released to authorities and the reasons for such disposition. 
The Committee returned to consideration of  
Management Response to 2010 Moss Adams Audit: 
Mr. Caluza reported on the 2010 audit of Port finances by the firm of Moss Adams, noting the
following: 
Audit results presented to the Audit Committee on May 3, 2011; 
Focus of the audit on financial statements and Comprehensive Annual Financial Report
(CAFR), regulatory compliance for federal grants ("Single Audit"), and Passenger Facility
Charge (PFC) Program; 
The Port's 2010 financial stewardship, including $400 million current assets, $5.5 billion
net capital assets, $3.3 billion long-term debt, $470 million operating revenues, $414
million operating and depreciation expenses, $40 million in federal grants and American
Recovery and Reinvestment Act (ARRA) expenditures, $59 million in PFC revenues, and
$217 million in net operating income (NOI), which amounts to $56 million after
depreciation; 
Outcomes of the 2010 financial statement audit, including an unqualified ("clean")
opinion, no findings relative to Generally Accepted Auditing Standards, no auditor letter
of recommendations, no audit adjustments to financial statements required of
management, issuance of the Port's CAFR ahead of schedule, and the very good overall
results of the audit; 
Outcomes of the 2010 "Single Audit" of federal grants, including no questioned costs, no
findings relative to internal controls, Port compliance in all material respects with federal
grants regulatory requirements, and a minor compliance finding related to back-funding
procedures for checking for ineligible contractors; and 
Outcomes of the 2010 PFC audit, which included no questioned costs, no internal
controls findings, and no findings with respect to Federal Aviation Administration (FAA)
regulatory requirements. 
Mr. Caluza explained that the minor compliance finding in the Single Audit was a procedural
weakness prior to 2009 that has since been corrected. He added that the 2010 audit did not




PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES         Page 3 of 6 
TUESDAY, JUNE 7, 2011 
identify any ineligible contractors and that Moss Adams checked the Excluded Parties List System
(EPLS) for Port contractors as part of the Single Audit and found no violations. 
Mr. Caluza announced that the Port's CAFR will be submitted to the Government Finance Officers
Association of the United States and Canada for consideration to receive the Certificate of
Achievement for Excellence in Financial Reporting Award, which has been awarded to the Port
consistently since 2005. 
Comprehensive Operational Audit Seattle-Tacoma International Airport Utilities: 
Regarding Airport utilities, Mr. Hutchinson reported that the department incurs approximately $14
million annually in operating expenses. He stated that expenses not recovered in direct tenant
billing are recovered through internal billings and Airport fees. 
Mr. Hutchinson stated that the audit objectives were to determine whether management has
implemented adequate controls to assure utility billing is complete, accurate, and in accordance
with the tariff and to assure costs in the utility-rate calculation are relevant, reasonable, and
complete. He noted that no findings resulted from the audit. 
Comprehensive Operational Audit Public Parking  Aviation Landside Operation: 
Ms. Kirangi described the comprehensive operational audit of the Airport's public parking
operation, noting that the garage generates approximately $50 million in annual revenues. She
provided a summary of parking revenues and operating expenses for the years 2008, 2009, and
2010, and noted that parking revenue has decreased during this period to $45 million. 
Ms. Kirangi stated that the audit objectives were to determine whether management has adequate
controls to ensure effective parking operations in compliance with applicable requirements, and
specifically whether monitoring controls work effectively as intended in the areas of complete and
proper assessment of high-risk transactions and determining whether overtime compensation is 
proper and reflects actual time worked. 
Ms. Kirangi noted that information relating to calendar year 2010 was reviewed and described one
finding resulting from the audit pertaining to incomplete management monitoring of exception
parking transactions, such as lost or unreadable tickets.  She  stressed the importance of
documenting deviations from standard procedures related to exception transactions. 
Ms. Kirangi explained that, in instances where implementation of better controls are warranted,
management is in agreement with the recommendations of the Internal Audit Department. 
The presentation materials for this operational audit demonstrated the audit had concluded that
overtime compensation was proper and for actual time worked. 
In response to Ms. Gehrke's question about examination of the parking operation's own internal
auditing process, Ms. Kirangi confirmed that the process was examined and noted that staffing
issues hindered its effectiveness. She added that the internal controls in this case are incomplete.


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TUESDAY, JUNE 7, 2011 
Ms. Gehrke noted that there was nothing in Internal Audit's schedule of findings addressing the
need for the parking operation to improve their own internal audit process. Ms. Kirangi responded
that because she considers the self-monitoring of parking controls a management function, greater
detail was not provided in the operational audit. 
In response to Commissioner Holland, Ms. Kirangi stated that operating procedures are in place,
but there is room for improvement in the review process, which is not complete. 
Commissioner Albro asked whether Port-issued prepaid parking access cards were included in the
operational audit. Ms. Kirangi responded that there is no charge associated with these cards,
which are usually issued for employee use and added that the audit focused on revenuegenerating
processes. She explained that the process for obtaining parking access cards is tightly
controlled.
In response to Commissioner Holland's question about expiration of the access cards, Mr.
Yoshitani stated that expired cards are deactivated regardless of whether they are physically
returned. He also commented that free parking access is a common issue at airports and stressed
that there are very tight controls on the issuance of these cards. 
Commissioner Albro asked for additional information from Internal Audit on the topic of parking
access cards at the Airport, which Ms. Kirangi said could be provided at the next Audit Committee
meeting, including review for appropriate card usage. 
Limited Operational Audit Mobile Devices/Smartphones: 
Mr. Fovargue reported on the limited operational audit of mobile devices and smartphones, and
outlined audit objectives based on review of billings and usage data from 2010 as related to
management's effectiveness in the following areas: 
Provision of sufficient, complete, and clear policy directives and governance on proper
mobile device usage; 
Adequate usage monitoring to ensure use of Port smartphones for intended productivity
benefits; and 
Implementation of adequate controls over usage levels and rate structures to ensure
best economic advantage to the Port. 
Mr. Fovargue commended  the Information and Communications Technology (ICT) staff for
prudently managing smartphone rate structures to obtain the greatest benefit to the Port.
Mr. Fovargue described the Internal Audit Department's finding that there were inadequate
management controls and unclear policy regarding smartphone usage, particularly with respect to
defining "incidental personal use." 
Commissioner Albro commented on the declining trend in smartphone rates for the Port. He also
stated that smartphones should be viewed as productivity tools and recommended articulating an
enterprise-wide strategy for using the technology to drive productivity.


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TUESDAY, JUNE 7, 2011 
Discussion and Recommendation for Audit Committee Improvements: 
Mr. Barnard presented results from a self-assessment questionnaire distributed to members of the
Audit Committee, highlighting the following points: 
Responses varied by experience and perspective of the respondents; 
Although no one seemed dissatisfied with the work of the Committee, there was
general agreement that there was a need for improvement; 
General knowledge of audit issues by the non-professional Committee members
seems lacking; 
More resources seem to be needed for the Internal Audit Department, including
provision for third-party contracted expertise; 
There are doubts as to whether the Commission is sufficiently engaged in audit
matters and there may be a need to report to the Commission more often than
annually on the Committee's work; 
It is unclear whether the Port's whistleblower protections are sufficient for the Audit
Committee; 
A knowledge gap may exist due to financial matters being funneled directly to the
Commission without Audit Committee participation, particularly with respect to
issues of business risks to the Port; and 
A lack of accessibility to the risk assessment work of the Internal Audit Department
by the Audit Committee. 
Ms. Gehrke suggested not establishing separate whistleblower provisions for the Audit Committee
separate from those of the Port at large and asked for non-identifying, statistical information on the
use of the Port's whistleblower process. Mr. Yoshitani explained that the Port's whistleblower
provisions do not include the Audit committee in its process, which would be a change in practice
and added that whistleblower issues have to be addressed immediately and cannot wait to be
handled by the Audit Committee. Ms. Kirangi described other avenues for collecting whistleblower
information. Ms. Gehrke clarified her interest in ensuring that topics raised in the whistleblower
process that affect the normal work of the Audit Committee would be communicated back to the
Committee. Mr. Barnard confirmed that a presentation on the Port's whistleblower process would
be provided at the July Committee meeting. 
Mr. Yoshitani commented that since the actions of the Audit Committee are not final, the
Committee might consider allowing the public member to vote on all issues. Mr. Barnard explained
that the Port's legal counsel had advised against allowing the public member to vote because he or
she would not be a Commissioner but would be serving on a Committee of the Commission. Both
Commissioners Albro and Holland voiced support for revisiting the public member's non-voting
status. 
Based on the survey responses, Mr. Barnard offered the following recommendations: 
Provide opportunities for the public member to receive the same quarterly and
annual briefings enjoyed by Commissioners; 
Retain an external party to assess the work of the Internal Audit Department in
conjunction with the internal quality-control review of Internal Audit planned for
2012;

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TUESDAY, JUNE 7, 2011 
That the performance metrics under development by Port staff be reviewed
periodically by the Committee; and 
That the Committee agree on what kinds of auditing risk and business risk they
want the Committee to focus on. 
Additional recommendations were listed in the presentation materials. 
Mr. Yoshitani cautioned the Committee against taking on too much responsibility.
Commissioner Albro echoed this sentiment and stated that the highest value of the
Committee is in ensuring the work of the Internal Audit Department is taking place reliably and
in ensuring compliance by staff with the policy direction provided by the Port Commission. He
requested implementation of quarterly reports of the Audit Committee to the Commission,
beginning with a June briefing on the Committee's 2011 work to date. 
ADJOURNMENT 
There being no further business, the special meeting was adjourned at 11:02 a.m. 

Rob Holland 
Secretary 
Minutes approved: July 12, 2011.