P.O. Box 1209 
Seattle, Washington 98111 
www.portseattle.org; 206.787.3000 
APPROVED MINUTES 
AUDIT COMMITTEE SPECIAL MEETING APRIL 8, 2021 
The Port of Seattle Commission Audit Committee met in a special meeting Thursday, April 8, 2021. The 
meeting was held remotely in accordance with the Governor's 'Safe Start' order and Proclamation 20-28. 
Committee  members  present  included  Commissioner  Cho, Commissioner  Bowman,  and Christina
Gehrke. Also present were Glenn Fernandes, Director, Internal Audit; Dan Chase, Internal Audit Manager; 
Aaron Pritchard, Commission Policy Manager; and Michelle Hart, Commission Clerk. 
1.    Call to Order: 
The committee special meeting was called to order at 2:30 p.m. by Commissioner Bowman. 
2.    Approval of Audit Committee Meeting Minutes of January 29, 2021: 
The minutes of the Audit Committee special meeting of January 29, 2021, were approved without 
objection. 
3.    External Audit  Director's Annual Communication  Independence, Internal Audit Charter,
Quality Assurance, and Follow-Up 
Presenters: 
Glenn Fernandes, Director, Internal Audit 
The presentation addressed: 
Annual communication required by the Institute of Internal Auditors' International Standards for the
Professional Practice of Internal Auditing (IIA Standards) on; 
o  Organizational independence. 
o  Internal Audit Charter. 
o  Quality assurance and improvement program. 
o  Open issues follow-up and monitoring process. 
Independence requirements; 
o  IIA Standard 1110 requires annual confirmation of organizational independence. 
o  Internal Audit Department continues to maintain organizational independence by reporting
functionally to the Audit Committee and administratively to the Executive Director. 
Quality assurance requirement; 
o  IIA  Standard  1300  requires  both  an  internal  and  external  quality  assurance  and
improvement program. External assessments (Peer Reviews) need to occur at least every
five years.



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THURSDAY, APRIL 8, 2021 
o  Generally-accepted Government Auditing Standards / Government Accountability Office
(GAO) requires an external assessment every three years. 
o  Most recently, in December 2018, an external assessment was conducted by the
Association of Local Government Auditors (ALGA) - due to COVID-19 Pandemic, the GAO
has extended the peer review timeline for any affected audit organizations, for up to two
years and three months beyond their review period. 
o  A self-assessment is conducted each year. It was last completed in August 2020. 
Charter review completed last year; 
Overview of the 'Aging Report,' as of April 8, 2021, tracking eight issues outstanding for more than
two years and four IT issues that do not have target dates and are not included as part of the chart
presented. 
Members of the Committee discussed the total number of issues being followed by the Internal Audit
Department and the value associated with following up on internal audit recommendations.
4.    2021 Audit Plan Update 
Presenters: 
Glenn Fernandes, Director, Internal Audit 
The presentation addressed: 
Overview and status of the approved 2021 Audit Plan to-date; 
o  Limited contract compliance. 
o  Operational audits. 
o  Information technology audits. 
o  Contingency audits  if resources exist, at internal audit director's discretion, these audits
will be moved to the 2021 audit plan.
Members of the Committee discussed what an audit of the North Satellite and Internal Arrivals Facility (IAF) 
would look like with respect to scope of the audits and the types of functions and activities that would be
reviewed.  Discussion ensued regarding the timeline of performing audits over these projects. Director
Fernandes spoke regarding the programming of the audits and external consultant assistance that may be
needed to assist in the future audits. 
5.    Operational Audit - Noise Monitor Data Accuracy 
Presenters: 
Glenn Fernandes, Director, Internal Audit 
The presentation addressed: 
Noise monitor data accuracy; 
Location of 24 permanent noise terminals. 
Identified instances where data was missing or appeared to be inconsistent, which indicated
that the monitoring terminals were not working as intended or that internal processes did not
process the data completely or accurately. 
Recommendation - Management should develop a process to proactively identify and resolve
system outages. This process should also include establishing criteria (i.e., frequency of
breakdowns, variance analysis) to trigger servicing and replacement decisions, in line with the
service response goals outlined in the agreement with L3Harris.



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THURSDAY, APRIL 8, 2021 
Management's response. 
Members of the committee discussed data collection integrity, providing the most accurate data as possible,
and protocols to identify when equipment has failed to perform. 
6.    Operational Audit  South King County Fund 
Presenters: 
Glenn Fernandes, Director, Internal Audit 
The presentation addressed: 
South King County Fund; 
Ten South King County organizations were recommended to receive funding through the first
cycle of the South King County Fund (SKCF) Economic Recovery Grants Program and were
approved by Port Commission on December 15, 2020. However, three additional Economic 
Development projects have been awarded from the SKCF, two of which did not receive
Commission approval. 
Recommendation  Establish ownership of the SKCF under two co-sponsors so it is clear
what projects need to be provided to Commission for approval.  Aligning project ownership
with two executives will facilitate consistent oversight and requirements of the program.  This
will also assure that approvals are obtained, organizations are selected, and the use of
awarded funds are monitored to assure that they are used for the intended purpose. 
Management's response  lessons learned, appreciation to staff, and partners in the fund. 
Pearse Edwards, Senior Director of External Relations, and Bookda Gheisar, Senior Director of Equity,
Diversity, and Inclusion, spoke regarding the review of the fund through the audit process and protocols put
into place to manage the fund between their departments.
7.    Operational Audit  Central Terminal Infrastructure Upgrade 
Presenters: 
Glenn Fernandes, Director, Internal Audit 
Spencer Bright, Internal Audit Manager 
Janice Zahn, Assistant Director of Engineering 
The presentation addressed: 
Central Terminal Infrastructure Upgrade (construction and closeout phases); 
The Port was overbilled approximately $18,181 through Force Account change orders. These
were primarily due to incorrect labor hours and billing rates submitted by Osborne and an 
inadequate review of documentation by the Port. 
Osborne documentation did not accurately support amounts billed to the Port in all the Force
Account change orders we reviewed. 
Errors were primarily due to Osborne double counting labor hours, days that an employee was
not on-site, and overtime billing rates for a salaried employee. 
Presents an opportunity for Port management to improve the change order review process
and seek and recover any amount due to the Port from overbilling. 
Osborne did not meet critical milestones, which resulted in the overall project not being
completed on time and the Port incurred additional costs to oversee the project. 
Four critical milestones needed to be substantially complete by specific dates for the project to
remain on schedule. If Osborne failed to meet those milestones, the contract provided the Port



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THURSDAY, APRIL 8, 2021 
the ability to assess liquidated damages (LDs). 
When milestones were not met, instead of assessing LDs, the Port issued Letters of
Forbearance (LOFs). These letters provided Osborne additional time to complete a Milestone
and submit proper documentation for justification. 
In all four Milestones, Osborne did not fully comply with the LOFs, by either not completing a
particular Milestone by the forbearance date, and/or submitting proper documentation. 
As of the report date, potential LDs amounted to approximately $908k. Construction
Management is currently reviewing documentation and will likely excuse days for each
Milestone. LDs will potentially be decreased or eliminated based on the results of their review. 
Reconciling post project (example: two years after the completion of Milestone 1), potential
exists that reliance will be placed, primarily on information provided by Osborne, and that
some of the excused days would not have been approved during the Project. 
If the Port enforced critical milestone dates, or the requirements of the LOFs during the
Project, Osborne may have been more diligent in completing the milestones, and ultimately
the Project sooner, which would have resulted in a lower cost to the Port. 
Management's response. 
Members of the Committee discussed better oversight of contractor billing records and protocols; meeting
agreement milestones, making sure the responsibility for justifying any delays is the responsibility of the
contractor; and informing the contracting community that these types of audits will be conducted. 
9.   Limited  Contract  Compliance  Audits    Seattle-Tacoma  International  Limousine  Association
(STILA) 
Presenters: 
Glenn Fernandes, Director, Internal Audit 
Jeff Hoevet, Senior Manager of Port Landside Operations 
The presentation addressed: 
Seattle-Tacoma International Association (STILA); 
STILA did not maintain the daily activity records, as required by the Agreement, which resulted
in a scope limitation. 
STILA is no longer an active business entity and has filed bankruptcy. 
Accordingly, Internal Audit was unable to obtain sufficient and appropriate audit evidence to
provide reasonable assurance that the additional per trip fees, billed solely on STILA selfreported
trip counts, were accurate and complete. 
As an additional procedure, Internal Audit compared STILA's self-reported monthly trip counts
to Automatic Vehicle Identification (AVI) system trip data and noted the following: 
o  AVI trip count data generally shows variances with STILA reported monthly trip counts to
the Port, as it captures, not only on-call limousine service  provided under STILA
operations, but also pre-arranged limousine services provided by certain independent
operators that belong to STILA. 
o  For March 2020 through December 2020, STILA reported trip counts were less than the
AVI data (21.1% at aggregate level). This could potentially be due to STILA operators
providing more pre-arranged limousine trips. However, Internal Audit was not able to
verify this since STILA was unable to provide us with any records. 
o  Regular monitoring and reconciliation of variances between the STILA self-reported
monthly counts and AVI trip data had not formally been established. 
o  Recommendation -  For broader consideration for the AVI  System and for Ground
Transportation as a whole (1) strengthen monitoring controls and (2) STILA back-owned

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minimum annual guarantee payments will be covered by STILA's surety. 
o  Recommendation  in consultation with the Port's Legal Department, seek and recover
the total outstanding balance of $157,284 (estimate), utilizing the rent security on hand. 
o  Management's response. 
Members of the Committee and staff discussed: 
STILA length of operational term at the airport - for over ten years; 
The AVI system used to record vehicle activity for on-demand and also for pre-arranged rides; 
The Port's refinement of its process for tracking vehicle activity and reconciliation if another
concession agreement for limousines at the airport is sought in the future; 
Record-keeping requirements of concession agreements - monitoring to be sure that records exist
and are properly being kept per agreement; 
Developing a plan to ensure that record-keeping issues like this do not occurring in the future; and 
Looking at options other than self-reporting from operators. 
10. Committee Comments 
Members of the Committee thanked staff for the audit information.
11. Adjournment 
There being no further business, the special meeting recessed for a ten-minute break at 4:04 p.m. and reconvened
in a non-public session to address security-sensitive information technology audit information
related to Malware Defenses  Aviation Maintenance for approximately 20 mins.  The meeting adjourned
immediately at the conclusion of the discussion.

Prepared:                                               Attest: 

Michelle M. Hart, MMC, Commission Clerk                Stephanie Bowman, Audit Committee Chair 
Minutes approved: June 17, 2021.