Item No. ________6e__________
Date of Meeting: _Jan. 6, 2009
Audit Committee ReviewAudit Committee ReviewAudit Committee ReviewAudit Committee Review
Tom BarnardTom BarnardTom BarnardTom Barnard
Policy Analyst
January 6, 2009January 6, 2009

BackgroundBackgroundBackgroundBackground
The Audit Committee was created to "represent the Commission and
have review and oversight authority on matters relating to the Port s have review and oversight authority on matters relating to the Port'shave review and oversight authority on matters relating to the Port s have review and oversight authority on matters relating to the Port's
auditing process and procedures." Its main tasks are to:
Review the audits of financial statements, federal grant and Passenger,Review the audits of financial statements, federal grant and Passenger,       g               g
Facilities Charge programs of the Port of Seattle, and other audit
services carried out by independent auditors, including any
recommendations they may have.
Review audit reports on the adequacy and effectiveness of the
accounting and financial controls of the Port of Seattle, and
recommend improvement of such internal controls or establish new
controls.
Perform oversight over periodic performance audits to be conducted
on Port of Seattle, and report the results of such audits to the
Commission when completed.

Organizational StrengtheningOrganizational StrengtheningOrganizational StrengtheningOrganizational Strengthening
The Manager of the Internal Audit Department now reports to the
Audit Committee, as well as the Chief Executive Officer (CEO).Audit Committee as well as the Chief Executive Officer (CEO)
All audits are reviewed in public session by the Audit Committee.
In 2008, the Audit Committee added a public member, Steve Miller,
with extensive experience in auditing governmental and other public
bodies.
The Internal Audit Manager hired three additional audit staff in 2008,
nearly doubling her staff.
The Audit Committee has designed a 2009 work plan. In addition, a
longer-range plan encompassing five years has begun.

2008 Results2008 Results2008 Results2008 Results
The Audit Committee reviewed and requested several external
audits, including the 2007 Moss Adams Audit, and the CAFR audit,audits including the 2007 Moss Adams Audit and the CAFR audit
and the follow up to the 2007 TKW audit.
It also followed up on several of the State Auditor's Office (SAO) pIt also followed up on several of the State Auditor's Office (SAO) p                                  ( )
Performance Audit recommendations.
The Audit Committee reviewed several departmental, concession
and lease audits by Internal Audit, including Payroll, Aviation and lease audits by Internal Audit including Payroll Aviation
Maintenance, and Pier 66 and Recreational Boating Management.
Departmental reports on outstanding issues previously reviewed by pDepartmental reports on outstanding issues previously reviewed by p   p    g   p   y   y
the Audit Committee are now required. A schedule of those
responses has been created.

Future WorkFuture WorkFuture WorkFuture Work
Internal Audit will conduct several third party agreements, Internal Audit will conduct several third-party agreements,Internal Audit will conduct several third party agreements, Internal Audit will conduct several third-party agreements,
concessions, and leases, including rental car agencies, Aviation IT
departments, and Police and Fire Services. The Committee will review
outstanding issues from previous Department Audits.
Internal Audit will incorporate performance audits into its audit
schedule. In the next five years, the goal is to have 50 percent of the
Internal Audit projects focus on performance audits.
Port management, in coordination with the Commission Audit
Committee and the Internal Auditor, has initiated development of a
Port-wide Enterprise Risk Management strategy. This effort will be
integrated into the Audit Committee's 2009 work plan.
The Audit Committee will also be having Entrance and Exit Interviews
for Moss Adams external audits and the next SAO performance audit.