Commissioners                                             Tay Yoshitani 
Gael Tarleton 
Chief Executive Officer 
Commission President 
Tom Albro                          P.O. Box 1209 
Bill Bryant                           Seattle, Washington 98111 
John Creighton                      www.portseattle.org 
Rob Holland                          206.787.3000 
An audio recording of the meeting proceedings and meeting materials are available on the Port of Seattle
web site - www.portseattle.org. 
APPROVED MINUTES 
AUDIT COMMITTEE SPECIAL MEETING SEPTEMBER 11, 2012 
The Port of Seattle Commission Audit Committee met in a special meeting Tuesday, September 11, 2012,
in the Commission Chambers at Pier 69, 2711 Alaskan Way, Seattle, Washington. Committee members
present included Commissioner Albro, Commissioner Bryant, and Christina Gehrke. Also present were
Dan Thomas, Chief Financial Officer; Joyce Kirangi, Internal Audit Department Director; Jack Hutchinson,
Internal Audit Manager; Ruthe Holden, CPA, CISA, CIA, CGAP, CGMA, Chief Auditor, Los Angeles County
Metropolitan Transportation Authority; Tony Samer, Managing Director, Protiviti; Daniel Hansen, Associate
Director, Protiviti; Laurie Tish, Moss Adams; Stacy Mattson, Manager, Airport Landside Operations; Jeff
Hoevet, Senior Manager Airport Operations; Brian Nancekivell, Senior Internal Auditor; Tom Barnard,
Research and Policy Analyst; and Katherine Blair, Commission Records Specialist. 
Call to Order: 
The committee special meeting was called to order at 9:02 a.m. by Commissioner Albro. 
Approval of Audit Committee Meeting Minutes of August 7, 2012: 
On motion by Commissioner Bryant, seconded by Commissioner Albro, the minutes of the Audit
Committee special meeting of August 7, 2012, were approved. 
Peer Review Exit Interview: 
Ms. Holden noted that in regards to the Government Auditing Standards (Yellow Book) the Internal Audit
department received a pass, which means the department complies with the Yellow Book standards.  For
the International Standards for the Professional Practice of Internal Auditing (Red Book), Ms. Holden
reported that the Internal Audit department received a pass with deficiencies, which means the department
partially complies with the standards.  She noted that the Internal Audit department does not follow Red
Book standards at the current time.  Commissioner Albro commented that the Red Book peer review was
conducted in order to see what changes would be required for the Internal Audit department to comply with
the Red Book standards. 
Ms. Holden reported that for the Yellow Book peer review the Internal Audit department received the
highest rating. She noted that there was a management letter issued that included areas of excellence as
well as recommended areas of improvement. She stated that there were two areas recommended for


PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES         Page 2 of 4 
TUESDAY, SEPTEMBER 11, 2012 
improvement in a management letter: implementation of annual monitoring of quality; and update the 
Auditors Handbook used by the Internal Audit department. 
Ms. Holden reported that the Internal Audit department received a medium rating for the Red Book peer
review and noted the following deficiencies: 
Update and Implement the Internal Audit department charter; 
Provide mandatory communication; and 
Update the Auditor's Handbook to include language needed from the Red Book. 
Ms. Gehrke lauded the Internal Audit department for receiving a medium rating on the Red Book peer
review because the department does not follow Red Book standards. Commissioner Albro concurred and
thanked Ms. Holden and the peer review committee for their work and noted the Audit Committee would
convey their appreciation by letter. 
Ms. Kirangi stated that the Internal Audit department is formalizing the process for performing a selfassessment
at the end of the year. She noted that the Internal Audit department has always immediately
addressed any items of concern, but there is no formalized process for reporting and recording that
information. She stated that in the future the process will be formalized and any issues that arise
throughout the year will be recorded in order to be able to report back to the Audit Committee and comply
with the Yellow Book standards. In response to Ms. Gehrke, Ms. Kirangi stated the Audit Committee would
see the first report at the end of the current year. 
To be in compliance with the Red Book standards, Ms. Kirangi noted the Internal Audit department charter
will need to be updated and implemented by the Audit Committee. In addition, she noted the mandatory
communication to the board will include a declaration of independence. She stated that the Internal Audit
department would like to be in compliance with both standards. Commissioner Albro asked if the
Committee would like to move to an orange book shop (following the Red and Yellow books standards), to
which Commissioner Bryant and Ms. Gehrke responded yes. Commissioner Albro asked to have an
updated Internal Audit department charter in November for discussion to be adopted in December. Mr.
Barnard suggested discussing the Audit Committee charter at the same to make sure the two documents
do not conflict.
IT Performance and IT Risk Assessment Entrance Conference: 
Mr. Samer stated that the Protiviti team is conducting an enterprise level technology assessment, which
includes independent risk assessment and an assessment of the performance of information technology at
the Port. He noted that the Port is a diverse business with diverse business requirements. 
In response to Commissioner Bryant, Mr. Samer stated that the deliverables will include: an overall set of
performance assessments, audit risk assessment, and a recommended three-year audit plan. In response
to Commissioner Albro, Mr. Samer noted that the audit plan would include reasoning for the prioritization.
Commissioner Albro asked if Protiviti would be providing the type of skill sets that would be required for the
Internal Audit department to be able to perform future assessments and audits on information technology,
and whether it is advisable to internalize such functions. Mr. Samer responded that it was not a formal part
of what Protiviti was asked to provide, but they would be willing to provide discussion on the topic.


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TUESDAY, SEPTEMBER 11, 2012 
Mr. Hansen stated the audit plan provides comments that will allow staff to infer what skill sets would be
necessary.  Mr. Samer stated the pace of technology change creates a challenge when maintaining the
necessary skill sets to audit information technology. 
In response to Commissioner Albro, Mr. Samer noted that there are benchmarks available to evaluate ICT,
including the Information Technology Process Institute (ITPI) benchmarks. He noted that the benchmarks 
look at the size of the environment, headcount, time spent assisting, etc. He stated there will be variations
depending on the line of business. Commissioner Bryant stated that the Commission wants to know
whether the growing ICT budget is being spent prudently. Mr. Samer replied that the assessment would
address that concern. In response to Commissioner Albro, Mr. Samer noted that the assessment will look
at the governance structure. 
Commissioner Albro asked to have the exit conference in December. Commissioner Bryant asked that if
during the risk assessment there is a finding with budget implications that the finding be communicated in
an interim report at the end of the October. Commissioner Albro requested that the stance the Port is
taking on information technology investments be presented during the budget briefings to the full
Commission. 
In response to Mr. Barnard, Mr. Samer stated that a capability maturity model is a framework used to help
evaluate an organization's capabilities and abilities against where they want to be across several areas. 
Moss Adams CAFR Audit Entrance Conference: 
Ms. Tish noted that Moss Adams will be conducting the single audit of the Port, which includes the audit of
the financial statements, which includes the enterprise fund and the pension trust fund.  She stated the
single audit also encompasses the audit and reporting on the internal controls and compliance over the
federal awards received by the Port. She commented the scope of work also includes an audit and report
on the passenger facility charges, which is not included in the single audit, but is required by the Federal
Aviation Administration. The last item included in the scope of work, Ms. Tish stated, is the schedule of net
revenue available for revenue bond debt service, which is required by bond covenants. 
In response to Commissioner Albro, Ms. Tish noted that risk areas change depending on circumstances.
She provided as an example the new risk represented by sale of portions of the Eastside Rail Corridor. Ms.
Tish noted that there are three types of risk, inherent, control, and detection. Commissioner Albro
requested an examination of real property disposition. 
Ms. Tish noted that new audit standards are going into effect in 2012 and those changes will be discussed
during the exit conference. She commented that the new standards are referred to as the clarity standards
and involve changes to the wording of the opinion letters. 
Mr. Barnard commented that it might be appropriate to have an interim briefing on the comprehensive 
annual financial report audit depending on the composition of the Audit Committee at the beginning of the
year.



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TUESDAY, SEPTEMBER 11, 2012 
Comprehensive Operational Audit  Ground Transportation: 
Mr. Nancekivell reported that the comprehensive operational audit on ground transportation covered the
period of January 1, 2010, to June 30, 2012. He noted the purpose of the audit was to determine the
following: 
All applicable tariffs are charged accurately, collected properly, and deposited intact; 
Concession revenue is properly calculated per the concession agreement and remitted timely; and 
All violations have been processed. 
In response to Commissioner Albro, Mr. Nancekivell stated that a bell in service is when there are not
enough taxis to provide service and the Port has to call in more. 
Mr. Nancekivell reported that the concession fees were not adequately monitored, but that no money was
owed. Ms. Mattson commented that the expectation of receiving a quarterly report was not clear, but will
not be an issue in the future. 
Mr. Nancekivell stated that about 20 percent of the violations were missing. Ms. Mattson noted that
recorded violations have to be billed or appealed once they are issued. She commented that staff tries to
gain cooperation of a violator before issuing a violation, sometimes by starting to fill out a violation, but then
voiding the violation. She stated that voided violations would not be in the system. 
In response to Mr. Barnard, Mr. Hoevet noted that a mobile solution for issuing violations is in development. 
Ms. Mattson commented that it would be at least one or two years before it would be implemented. 
Commissioner Albro requested a discussion on the Internal Audit department budget at the next Audit
Committee meeting. 
Adjournment: 
There being no further business, the special meeting was adjourned at 10:32 a.m. 

Bill Bryant 
Minutes approved: November 13, 2012