Internal Audit Briefing 

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

Joyce Kirangi, CPA 
Director, Internal Audit 
October 2, 2012

Agenda 
Audit Report 
1.  Lease and Concession Audits 
Doug Fox Parking 
2.  Operational Audits 
Central Processing System 
None 
Comprehensive Operational Audit 
Airport Customer Service Department 
Limited Operational Audit 
None 
3rd Party Audit 
None 
Briefing/Updates 
1.  Proposed Charter for the Internal Audit Department 
2.  Preliminary Discussion of the 2013 Internal Audit Budget

Lease and Concession Audit 
Doug Fox Parking 

Background 
Doug Fox Parking operates a parking lot located on S. 170th Street under a
lease and concession agreement. The terms of the agreement provide for
tiered percentage fees on gross parking, ranging from 54.5% to 75%. 
Fiscal Year         Reported Gross Revenue  Paid Concession 
2009  2010            $4,229,662    $2,343,446 
2010 - 2011              3,964,106     2,160,192 
Source: PROPWorks

Lease and Concession Audit 
Doug Fox Parking 

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 annual report is accurate, complete and timely. 
We examined the books and records of Doug Fox Parking for a period of
thirty-two months from October 1, 2009, through May 31, 2012.

Lease and Concession Audit 
Doug Fox Parking 

Audit Result 
One Finding 
o Untimely Reporting of Online Reservation Deposits

Comprehensive Operational Audit 
Customer Service Operations 

Background 
The Customer Service Operations Department (formerly the Air Terminal
Operations Department) within the Aviation Operations group has 20 FTEs
with an annual operating budget of $11 million. The Department changed its
name in 2012 to better reflect its dual focus of providing service to the two
primary customers of Seattle-Tacoma International's Airport the airlines and
their passengers. 
Air terminal fees such as ticket counter, gate, and space rental fees
generated approximately $132 million in 2011.

Comprehensive Operational Audit 
Customer Service Operations 

Audit Objectives 
The purpose of the audit was to determine whether management has
employed adequate controls to ensure: 
Revenues derived from common-use systems in the terminal are
complete 
Analytical processes and metrics for evaluating passenger customer
service are effective 
We reviewed information for the period of January 1, 2011  June 30, 2012.

Comprehensive Operational Audit 
Customer Service Operations 

Audit Result 
No Finding

Proposed Charter for the Internal Audit Department 

In accordance with the recommendations from the Yellow/Red Book Peer Review, the
following items have been added to the Internal Audit Department Charter: 
The Director will provide to the Audit Committee the mandatory annual communication
required by the IIA standards specifically on the organizational independence, department
charter review, and results of the department quality assurance program. (Page 3 of the
Charter) 
Maintain an effective system of internal controls, document policy and procedures, and
ensure information is accurate and reliable. (Page 3 of the Charter) 
Comply with laws and regulations including Port policies and procedures. (Page 3 of the
Charter) 
Cooperate fully with auditors during discharge of their duties including making available
material or information requested by internal audit staff or any other external auditors
managed by the Internal Audit Department. (Page 3 of the Charter) 
Provide timely response to audit findings and recommendations. (page 3 of the Charter)

Proposed Charter for the Internal Audit Department 

Assure timely implementation of agreed-upon corrective action(s) to audit
recommendations. (Page 3 of the Charter) 
The Audit Committee will approve the Internal Audit Department annual budget and
regularly review the department's staffing needs. (Page 4 of the Charter) 
The Audit Committee will review and concur in the appointment, replacement or
dismissal of the Internal Audit Director. (Page 4 of the Charter) 
The International Standards for the Professional Practice of Internal Auditing (the
Standards) of the Institute of Internal Auditors (Red Book). (Page 5 of the Charter)

Briefing/Updates 


Preliminary Discussion of the 2013 Internal Audit Budget