Port of Seattle 
2015 Audit Engagement Service Plan 






999 Third Avenue, Suite 2800 
Seattle, WA 98104 
206.302.6500

SCOPE OF WORK 
The primary purpose of our audit engagements is to form an opinion on the fairness of presentation of
the financial statements of the Port of Seattle as of and for the year ended December 31, 2015 in
accordance with accounting principles generally accepted in the United States of America and to audit
and report on the administration of federal awards received by the Port in accordance with Federal
OMB A-133 and OMB Uniform Grant Guidance. The audits will be performed in accordance with
auditing standards generally accepted in the United States of America and Government Auditing
Standards. 
The following summarizes the services to be provided: 
Audit and report on financial statements for both the Enterprise Fund and the Warehousemen's
Pension Trust Fund included in the Port's Comprehensive Annual Financial Report. 
Audit and report on internal control and compliance over financial reporting in accordance with
Government Auditing Standards. 
Audit and report on the Airport Improvement Program and other major Federal Financial
Assistance Program[s] and related internal controls and compliance in accordance with Federal
Uniform Grant Guidance (formerly OMB A-133). 
Audit and report on the schedule of Passenger Facility Charge (PFC) program receipts and
expenditures and related internal controls. 
Audit and report on the Schedule of Net Revenue Available for Revenue Bond Debt Service. 
Perform Agreed upon procedures and report to the Washington Department of Ecology 
pertaining to the Terminal 91 Facility. 
Issue a management letter of recommendations and observations, if necessary. 








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OUR AUDIT APPROACH 
In accordance with generally accepted auditing standards and Government Auditing Standards, our
firm utilizes a risk based approach to conduct our audits. Moss Adams performs its audit engagements
using a risk-based approach that requires the auditor to obtain an in-depth knowledge of the Port's
operations and the industry as a whole. 
Audit risk involves the risk of material misstatement in the Port's financial statements and arises
because the audit is designed to provide reasonable (not absolute) assurance that the financial
statements are free of material misstatements. The audit risk model is composed of three elements;
inherent risk, control risk, and detection risk, which must be evaluated and assessed separately, either
quantitatively or qualitatively. We assess risk at the level of high, medium, or low. 
Inherent risk represents the susceptibility of an account balance, class of transaction, or
disclosure to material misstatement based solely on their nature; this risk exists independently
of the audit. For example, due to the complexity of the estimate, environmental remediation 
liability is an inherently risky balance. Inherent risk includes fraud risk and the risk of material
misstatement due to fraud. 
Control risk represents the risk that a material misstatement could occur in a system or in an
assertion that will not be prevented or detected on a timely basis by the Port's structure of
internal control. Although control risk exists independently of the audit and is the responsibility
of management, we will modify our audit procedures based upon assessment of the risk. 
Detection risk represents the risk that the auditor will not detect a material misstatement that
exists in an assertion. It is a function of the effectiveness of applying our audit procedures. 
We assess audit risk at the overall financial statement level, individual account balance, transaction, or
disclosure level during the planning phase of our audit (risk assessment procedures). Our overall
judgment about the level of the risks above will affect the scope of the audit, including the nature,
timing, and extent of our audit procedures. 
Phase I - Planning 
The following risk assessment activities are performed: 
Entrance meetings with certain  Port Commissioners, management and staff to discuss
expectations, the audit process and timelines, and to obtain key strategic, financial, and
operational information. 
Observation and inspection of documents. 
Identify Port-specific and industry developments that might require an expansion or
modification of audit tests. 
Conduct risk brainstorming meeting with our own staff as well as meetings with Port
executives, management, and other personnel. 


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Based on the results of the risk assessment procedures noted above, we conclude the planning phase
by performing the following: 
Define the scope of the engagement including determination of potential major programs for
the Federal Circular OMB A-133  and Federal Uniform Guidance (as applicable) and the
applicable audit procedures. 
Ascertain timing of conduct and completion of audit, reporting submission deadlines, and
nature of reports to be issued. 
Design an efficient audit approach and audit programs with sufficient risk coverage. 
Establish preliminary materiality and the non-posting threshold for trivial matters noted during
the audit 
Materiality 
Materiality is the maximum level of misstatement that can be tolerated in the financial statements
without causing a reasonable person's judgment about them to be significantly changed or influenced.
We determine materiality as follows: 
Conduct preliminary analysis of financial statements to make initial judgment of materiality. 
Consider the needs and expectations of the readers of the financial statements. 
Consider both quantitative and qualitative factors. 
Major program determination is made using the guidance provided by Federal Circular OMB
Uniform Guidance. 
Re-evaluate materiality level throughout the engagement and conclude on final materiality level
upon completion of the audit. 
We identify all quantitative critical components to the financial statements such as total assets, net
position, capital assets, revenue, and the increase in net position. We determine the most relevant
critical component to the users of the financial statement and using a benchmark percentage, we
calculate an overall materiality amount; for example a benchmark percentage multiplied by a critical
component such as total revenues. We also utilize planning materiality to determine the extent of
applying audit procedures; for example, it can be used in connection with performing substantive
analytical procedures and in determining sample size. 
Non-Posting Threshold for Trivial Matters 
The trivial matters threshold establishes a level for which misstatements are considered to be
inconsequential to the financial statements. The trivial matters threshold is established at the planning
stage and is calculated as a percentage of planning materiality. We notify Port management regarding
all misstatements discovered in  the audit and although we may consider a misstatement
inconsequential, management may elect to record an adjustment, even if it is deemed to be trivial. All
potential adjustment amounts above the trivial matters threshold are analyzed individually and in
aggregate to determine potential impact to the financial statements. 

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Phase II - Assessment of Internal Control 
Internal control is a process that is designed to provide reasonable assurance over the achievement of
the Port's objectives such as reliabilityof the Port's financial reporting, effectiveness and efficiency of
operations, and compliance with the laws and regulations. The framework used in assessing the Port's
internal control consists of five interrelated components; control environment, risk assessment,
control activities, information and technology, and monitoring. Our firm follows a top-down approach
when evaluating internal control starting with entity-level controls and narrowing to controls that
relate to specific financial statement assertions as follows: 
Obtain and assess the Port's entity-level controls including  the information technology
environment and the effect on the internal control structure. This includes assessing the 'tone
at the top'; i.e. controls in place at the Commission and executive level. 
Identify significant accounts and processes: 
Administration of federal awards and related administrative controls 
Billings, cash receipts, and receivables 
Airport lease agreements, seaport and real estate leasing arrangements and other 
operating leases in place 
Procurement, cash disbursements, and payables 
Payroll 
Capital projects 
Treasury and investments 
Debt and related accounts 
Environmental remediation liability and contingencies 
Third party management 
Financial close and reporting 
Information technology (general computer controls) 
Budget 
Obtain copies of system, policy, and procedure documentation from various departments. We
retain these copies in our permanent working paper files and update them annually. 
Obtain knowledge of design and implementation of controls relevant to financial statement
assertions and compliance with laws and regulations that have direct and material effect on
determination of financial statement amounts. After gathering this information we perform
"walkthroughs" to verify that our understanding ofthe system and its controls is accurate and
that key controls exist and are operating as designed. 
Perform tests of controls that relate to financial statement assertions and perform tests of
controls and compliance related to the Port's federal awards: 
Allowable costs and activities 
Cash management 

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Davis-Bacon Act 
Equipment and real property management 
Matching and level of effort 
Period of availability 
Procurement and suspension and debarment 
Program income 
Reporting 
Subrecipient monitoring 
Special tests and provisions unique to the major programs 
Information Technology (IT) Systems and General Computer Controls 
Determine application systems, databases, and operating systems in scope based on the
business process walkthroughs of our financial audit team. 
Identify any application controls our financial audit team is planning to place reliance upon. 
Procurement, cash disbursements 
Payroll 
Billing 
Capital projects 
Financial close and reporting 
Identify key IT general computing controls that support automated and application controls to
be relied upon by our financial audit team. 
Security and access 
System acquisition and implementation 
System changes/change management 
Computer operations 
Conduct walkthroughs of significant application and general computing controls to assess
effectiveness of design and implementation. 
Perform tests of IT controls and compliance. 
Phase III - Substantive Audit Procedures 
We tailor our audit programs for each balance to obtain evidence from a combination of (1) internal
control testing, (2) analytical procedures, and (3) substantive testing. The balance of evidence to be
obtained from each of the three general types of procedures is determined using an audit approach
decision model taking into account the strength of the Port's system of internal controls. 


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Test of Details 
Directed testing and audit sampling are used to perform tests of certain financial statement
account balances. 
Directed testing utilizes judgment and expertise and selections are based on risk and dollar
value; we use directed testing approach for most financial statement balances where efficient. 
Random and judgmental sampling methods are utilized (method depends on population). 
Compliance with requirements of the major federal award programs is tested. 
Analytical Procedures 
In the planning phase, we perform a comparison of current and prior year results and actual
and budgetary information, as well as an analysis of the Port's major transactions during the
year. 
During substantive testing, we perform an analysis of the detail of changes to certain accounts
such as capital asset, long-term debt, and investment accounts. For other accounts, we
frequently use predictive analytical tests such as using specific data to develop expectations. 
At the conclusion of the audit, we do a holistic review of the financial statements in light of the
results of other auditing procedures and assess whether we have appropriately addressed all
critical areas. 
Conferences and Audit Progress Reports 
We will schedule both an entrance and exit conference with the Port's Audit Committee and
management. On a weekly basis during audit fieldwork we will provide management with a status
report of progress, unusual or significant accounting issues, proposed and passed audit adjustments,
potential management letter comments, and difficulties encountered, if any. 
Phase IV - Completion of Audit and Presentation of the Audit Results 
Upon completion of substantive procedures, we assemble testing results to determine the matters that
are reportable to management and to the Audit Committee. This process entails assessing whether
there are control deficiencies, whether individually or in aggregate, which are severe enough to meet
the definition of a significant deficiency or a material weakness. We also conduct final engagement
quality control reviews and prepare required deliverables. 
Finally, we are required by auditing standards to communicate, in writing, to management and those
charged with governance, all significant deficiencies and material weaknesses noted as a result of our
audit. For minor observations, we provide information on our observations regarding controls and
various other communications either verbally or in the form of a formal management letter of
recommendations to the Port. 


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AUDIT, ACCOUNTING, AND REPORTING MATTERS 
We have highlighted certain matters of audit emphasis pertinent to the Port: 
Bond Accounts 
The bond related accounts always provide challenging audit and accounting issues. Among them are: 
New debt issuances 
Refunding, defeasances or extinguishment 
Compliance with covenants 
Capitalized interest 
Arbitrage liability 
Leases 
Leasing issues are complex and are prevalent in all the Port's lines of business. For instance, we will
devote audit effort and resources to the following: 
Real estate transactions within the Real Estate Division 
New and significant leases at the Airport and Seaport Divisions 
Review of Port's controls over ongoing accounting and monitoring of existing leases 
Revenue Recognition 
Revenue recognition complexities: 
Airline lease agreements 
Other operating revenue 
Tax, PFC and federal grant receipts, and investment income 
Capital Assets 
Capital assets issues and related accounts: 
Capitalization policies and classification of closed and on-going projects 
Asset retirements and demolition 
Project costs and overhead allocation 
Depreciation expense 
Impairment analysis 
Environmental Remediation Liability 
Environmental remediation complexities include: 
Estimation by site of future liabilities and related expense 
Asbestos remediation efforts 
Superfund site remediation efforts 
Capital vs. expense classification 
Pension Plans and Other Post-Employment Benefits 
These include complex disclosure requirements and calculations performed by specialists which are
relied upon by Port management. 

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NEW ACCOUNTING PRONOUNCEMENTS & STANDARDS 
GASB Statements that will be effective for the Port in 2015 or later and should be evaluated are: 
GASB Statement No. 68, "Accounting and Financial Reporting for Pensions", effective for the Port in
2015, provides standards for measuring and recognizing liabilities, deferred outflows of resources, and
deferred inflows of resources, and expenses. This standard will impact the Port's note disclosures and
the accounting and reporting for the enterprise fund's pension obligation. We have been working with
management to plan for the implementation of this standard. 
GASB No. 71 "Pension Treatment for Contributions Made Subsequent to the Measurement Date", effective
for the Port in 2015, addresses an issue regarding application of the transition provisions of Statement
No. 68, Accounting and Financial Reporting for Pensions. The issue relates to amounts associated with
contributions, if any, made by a state or local government employer or nonemployer contributing
entity to a defined benefit pension plan after the measurement date of the government's beginning net
pension liability. We have been working with management to determine the impact of this statement
on the Port's financial statements. 
GASB No. 72 "Fair Value Measurement and Application", effective for the Port beginning 2016, however
early adoption is permitted. The statement addresses accounting and financial reporting issues related
to fair value measurements. The definition of fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. This Statement provides guidance for determining a fair value measurement for
financial reporting purposes. This Statement also provides guidance for applying fair value to certain
investments and disclosures related to all fair value measurements. 
GASB No. 73 "Accountingand Financial Reporting for Pensions and Related Assets That Are Not within
the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68". 
The objective of this Statement is to improve the usefulness of information about pensions included in
the general purpose external financial reports of state and local governments for making decisions and
assessing accountability. This statement is effective for the Port in 2017. 
GASB No. 74 "Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans".  This
Statement results from a comprehensive review of the effectiveness of existing standards of
accounting and financial reporting for all postemployment benefits (pensions and OPEB) with regard
to providing decision-useful information, supporting assessments of accountability and interperiod
equity, and creating additional transparency. This statement is effective for the Port in 2017. 
OMB Grant Reform  effective for the Port in 2015, this Uniform Guidance streamlines the federal
government's guidance onadministrative requirements, cost principles, and audit requirements for
federal awards. This guidance is meant to provide greater transparency over the A-133 process and
impacts such areas in limiting the types of allowable costs, strengthening oversight, providing a
consistent and transparent treatment of costs, eliminating duplicative and conflicting guidance, and
focusing on performance over compliance for accountability. This guidance also reforms audit
requirements which puts more emphasis on risk, increases the audit threshold from $500,000 to
$750,000 and it slightly changes the audit consideration over a High Risk Type A and B programs. We
have been working with management to determine the impact of this guidance on the Port's single
audit procedures. 

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AUDIT TIMING 

AUDIT SCHEDULE                             TIMING 
Audit Planning 
Meet with the audit committee to provide an overview of the     October 2015 
planned scope and timing of the audit in our engagement
service plan. 
Meet management and accounting staff to set up the year-end audit     October 2015 
timeline, identify and resolve pertinent issues, perform a risk
assessment, and address any concerns of management or members
of the audit committee or Port Commission. 
Provide management with a detailed comprehensive list of account     October 2015 
analyses and other materials to prepare prior to the start of the
audit. Work closely with those involved in the audit process to
clearly identify roles and responsibilities during the audit. 
Meet with Port management to discuss new Port transactions or    Quarterly 
activities and new or pending accounting and auditing guidance. 
Audit Fieldwork 
Perform interim field work to perform testing of the Port's internal     October 2015 (Testing of IT
controls and to facilitate planning for year-end audit fieldwork.     controls in November 2015) 
Test certain accounts such as revenue recognition, leases,
environmental liabilities, and construction in progress. 
Perform procedures related to administration of federal awards in    October 2015 and March 2016 
accordance with Federal Circular OMB A-133  and Uniform
Guidance. 
Perform the year-end audit fieldwork of the Port's account    March and April 2016 
balances (financial statement audits and testing of Schedule of
Federal Awards). 
Perform the audit on PFC receipts and expenditures and related    March 2016 
internal controls. 
Report Preparation 
Issue our opinion on the financial statements and schedule of Net     On or before April 29, 2016 
Revenue Available for Revenue Bond Debt Service. 
Issue Single Audit reports and PFC program audit report             On or before April 29, 2016 
Issue Agreed Upon Procedures report and the draft management     On or before May 31, 2016 
letter of recommendations. 
Meet with the Audit Committee  and management to present    As requested; no later than
audit results.                                              June 30, 2016 

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MOSS ADAMS AUDIT TEAM 
The management team serving on our audits of the Port of Seattle is as follows: 

Laurie J. Tish, CPA, Business Assurance Partner 
Laurie is our firm's national practice leader for Government Services. Laurie has
specialized in serving governmental entities since she began her career in public
accounting over 30 years ago. Laurie will serve as your lead client service partner,
overseeing all projects we perform for the Port. 

Olga Darlington, CPA, Business Assurance Senior Manager 
Olga  specializes in serving governmental entities and has significant experience
conducting audits in accordance with Government Auditing Standards and Federal OMB
Circular A-133. Olga will serve as the concurring engagement reviewer. The concurring
engagement reviewer serves as the secondary review of our audit plan, the financial
statements and our reports and, as necessary, will consult on technical issues or key
elements of the audits. 

Chris Kradjan, CPA, Moss Adams Advisory Services Partner 
Chris is a member of our Governmental Services Group and specializes as an
Information Technology consultant. Chris will lead our audit procedures covering the
Port's IT systems, including general computer controls. 


Kevin Villanueva, CPA, IT Consulting Senior Manager 
Kevin Villanueva is a Senior Manager with the Information Technology Consulting
Group and leads the firm's information security and infrastructure practice. Kevinis
a Qualified Security Assessor as designated by the PCI Security Standards Council and
has over 16  years of experience in information technology  with industry
specialization in municipal enterprises. Kevin will serve as an additional reviewer for
our IT procedures and will oversee or perform procedures related to IT security
matters. 

Kimberly Koch CPA, IT Consulting Senior Manager:
Kim has over ten years of public accounting experience, specializing in tax exempt
and governmental entities. Kim will serve as project manager for our tests ofthe 
Port's general computer controls. 

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Tyler Reparuk CPA, Business Assurance Manager:
Tyler has over five years of public accounting experience and this will be hissixth 
year serving the Port of Seattle. Tyler will serve as a manager and will spend his time
reviewing the work performed by staff in the field and managing each of theaudits 
we perform for the Port. 

Lisa Dion CPA, Business Assurance Manager:
Lisa has four years of public accounting experience and this will be her fifth year
serving the Port. Lisa has experience in performing governmental financial statement
audits and Federal Circular OMB A-133 audits. Lisa will serve as a manager and will
spend her time assisting with the supervision of staff in the field and managing the
audits of the Port. 


In addition, the following individuals will serve the Port of Seattle: 
Chris Wyckoff CPA, Business Assurance Senior: Chris has four years of public accounting experience and
has significant experience with audits of tax exempt entities and OMB A-133 Audits. Chris will primarily
spend time working on the financial statement and OMB A-133 audits. 
Abby Barr, Business Assurance Staff: Abby has one year of public accounting experience and this will be
her second year serving the Port. Abby will primarily spend time related to the financial statement
accounts. 
Anna Waldren CPA, Business Assurance Staff: Anna has one year of public accounting experience. Anna
has experience with tax exempt entities and OMB A-133 audits. Anna will primarily spend time working on
the financial statement and PFC Audits. 
Branch Richards & Co, Subcontractor: We have engaged Branch Richards & Co., a small business
initiative firm, to serve as our subcontractor. Fiona Deng, experienced staff, will be fully integrated into our
audit team in working on each of the audits. This will be her third year serving the Port. 






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COMMUNICATIONS TO AUDIT COMMITTEE 
Auditing standards require the auditor to communicate certain matters to the Audit Committee that
may assist in overseeing management's financial reporting and disclosure process. 
Auditor's responsibilities under generally accepted auditing standards 
Other documents containing audited financial statements 
Critical accounting policies and practices 
Difficulties encountered when performing the audit 
Unadjusted audit differences considered by management to be immaterial 
Significant audit adjustments 
Disagreements with management, if any 
Representations requested of management 
Judgments about the quality of accounting and sensitive estimates 
Adoption of, or a change in an accounting principle 
Method of accounting for significant unusual transactions or controversial or emerging areas 
Fraud and illegal acts 
Material weaknesses in internal control 
Major issues discussed with management prior to retention 
Ability to continue as a going concern 
Legal, regulatory, or contractual requirements not encompassed in the current engagement 
Consultation with other accountants 
Independence of Moss Adams 
At the conclusion of our audits, we will present our reports, the results of our audit and the required
communications noted above, to the Audit Committee. 




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