Commissioners                                               Tay Yoshitani 
Chief Executive Officer 
Bill Bryant 
Chair and President 
Tom Albro                             P.O. Box 1209 
John Creighton                       Seattle, Washington 98111 
Rob Holland                           www. portseattle.org 
Gael Tarleton                              206.728.3000 

An audio of the meeting proceedings and meeting materials are available on the Port of Seattle
web site - http://www.portseattle.org/about/organization/commission/commission.shtml 
APPROVED MINUTES 
AUDIT COMMITTEE SPECIAL MEETING MARCH 9, 2010 
The Port of Seattle Commission Audit Committee met in a special meeting at 9:00 a.m., Tuesday,
March 9, 2010 in the Commission Chambers at Pier 69, 2711 Alaskan Way, Seattle, WA.
Committee members Albro, Tarleton and Miller were present, as well as CEO Tay Yoshitani and
Joyce Kirangi, Port Internal Audit Manager. 
CALL TO ORDER 
The committee special meeting was called to order at 9:07 a.m. by Commissioner Gael Tarleton. 
Approval of Minutes 
Motion for approval of minutes of the February 2, 2010 meeting  Albro 
Motion carried by the following vote: 
In Favor: Albro, Tarleton (2) 
Mr. Miller participates as a non-voting member of the Committee. 
Status Report on Moss Adams Interim Fieldwork Tests 
Presentation document: Computer slide presentation 
Presenter: Laurie Tish, Moss Adams, LLP 
Ms. Tish reviewed the four main phases of the 2009 Audit as follows: 
Planning and risk assessment  completed 
Assessment of internal controls  completed 
Substantive audit procedures  in process 
Reporting and presentation of audit results 

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Commissioner Albro raised the question regarding the review of the internal control process and
having assurance as to whether there is efficiency and effectiveness of operations. He also asked
what may be taking place within the Port to measure effectiveness. 
CEO Yoshitani commented on the internal control process, noting that working on that process has
recently been assigned to Chief of Staff, Kurt Beckett, who will be looking at all departments and
divisions over the next six months regarding what is being done and how that can be measured. 
Ms. Tish provided a brief review of the approach used by Moss-Adams for Internal Control Testing,
noting that it is a top-down approach. She commented on the wide variety of significant accounts
and processes selected to be tested, which include the following:
Billings 
Cash receipts 
Procurement 
Cash disbursements 
Payroll 
Capital projects 
Treasure and Investments 
Pollution remediation 
Third party management 
Budget 
Responding to Commissioner Tarleton's question as to whether or not they have been getting any
alerts or indicators of areas of weakness, Ms. Tish confirmed that at this point in the audit, no
material weaknesses have been discovered.
Ms. Tish stated that Moss Adams will return in May for the exit of the financial statement audit and
in June for the exit of the single audit. 
Ms. Tish confirmed for Commissioner Tarleton that by the end of April, the Committee should have
a draft of the Moss Adams findings. 
Responding to a question from Mr. Miller about the internal audit of the disbursement system, Ms.
Tish stated that Moss Adams was aware of it and that it had been incorporated into the approach
of their audit as well. She noted that there were some areas of overlap, but also some differences
in the audits. 
INTERNAL AUDIT REPORTS: 
Port of Seattle Disbursement System  Accounting and Financial Reporting (AFR)
Department 
Presentation document: Internal Audit Report dated March 9, 2010 
Presenters: Joyce Kirangi, Director, Internal Audit and Andy Medina, Senior Internal Auditor 

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Ms. Kirangi commented on the significance of the disbursement system, noting that it is the gate in
terms of how money flows out of the Port. Commissioner Tarleton reiterated the fact that there is a
huge volume of transactions which go through the system. 
Mr. Medina explained that this was a system audit as opposed to a departmental audit, noting that
the disbursement system encompasses every department at the Port, however the scope of the
audit did not include actions of each department, but rather the central operations performed by
accounts payable and payroll. 
Regarding the volume of disbursements over the past three years, Mr. Medina stated that there
has been an average of $699 million per year, of which $108 million was attributable to payroll and
$591 to accounts payable. 
Mr. Medina reviewed the three objectives of the audit as follows: 
Determine if the risk assessment performed by Accounting and Financial Reporting
adequately addresses the risks impacting disbursements, as well as the controls
necessary to mitigate those risks to an acceptable level. 
Identify internal controls related to disbursements, and evaluate their effectiveness in
ensuring accuracy, efficiency and accountability. 
Determine if the computerized controls have been properly configured to prevent
payments against an invalid contract; prevent unauthorized access to incompatible
disbursement functions; prevent inappropriate changes to positive pay files; and ensure
proper authorization of wire transfers. 
Mr. Medina stated that the result was a clean audit with no findings and commended the AFR
department for designing effective controls and for coordinating the disbursement process well with
the other departments 
Commissioner Albro commented on including within the internal audit reports an assessment of
whether or not any refinements might be necessary in order to make improvements to operational
effectiveness. 
Responding to a question from Mr. Miller regarding possible incompatible duties, and who has
access to the vendor maintenance function vs. disbursement initiation, Mr. Medina clarified that
there is no overlap in those functions 
Related to the sample size for this audit and how the selection was made, Mr. Medina stated each
test area (such as request for checks, wire transfers, EFTs) had a different approach. 
Concessions International, LLC  Lease and Concession Audit 
Presentation document: Internal Audit Report dated February 9, 2010 
Presenters: Joyce Kirangi, Director, Internal Audit and Jack Hutchinson, Manager, Internal Audit 

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Ms. Kirangi stated that this compliance audit was conducted for the period of January, 2006
through December, 2008, noting the major objectives of the audit as follows: 
Reported concession was complete, properly calculated and remitted timely to the Port 
Port and lessee complied with provisions of the Lease and Concession Agreement 
Lease and Concession Agreement complies with applicable state and Port policies 
She noted that based on the work completed during the audit, they found that Concessions
International did comply in terms of remitting to the Port the percentage they were supposed to. 
She noted, however, that there were two issues to communicate, one being that there were many
instances when the lessee did not make their payments in a timely manner or in accordance with
the lease agreement. She noted that management did not monitor when payments were, or were
not, received. The other issue was that of non-compliance with the terms of the lease, and the
need to have a self-reporting system. Reports which should have been provided to the auditor
were not filed in a timely manner.
Responding to Commissioner Tarleton's questions about language included in leases and a
systematic way of enforcing compliance with the terms and conditions of the leases, Ms. Kirangi
stated that beginning in June 2009, a system of manual controls had been implemented and stated
that they would follow up to see whether or not those controls are working effectively. 
Commissioner Tarleton noted the importance of having triggers from within our own systems as
opposed to finding out about issues from externally. 
Commissioner Albro stated the importance of putting together lease and concessions agreements
so they are more readily enforceable.
Responding to a question raised by Commissioner Albro regarding the collecting of late fees and
interest related to the late payments, Mr. Yoshitani stated that staff is exploring what
communication took place between management and the concessionaire, and also noted that the
legal department is looking into this. 
Commissioner Tarleton stated that she would like to see a follow-up presentation to the
Committee. Mr. Miller suggested that that presentation take place within 90 days. 
Commissioner Tarleton commented on the need to see consequences of late payments, not only
of Concessions International, stating that it is partially related to the dollar value, noting that there is
potentially a material amount of money due to the fact that there are some 600 contracts, leases
and agreements that the Port holds. She stated that not only is this significant monetarily, but also
reflects on the integrity of the contracts and of the systems. 
Rudy Caluza, Director, Accounting and Financial Reporting, briefly reviewed new systems which
have been implemented in order to address issues which have been raised in the areas of
collections and accounts receivable. 
Mr. Miller encouraged Ms. Kirangi to have her staff move up their report on the accounts receivable
billing system, due some recent discomfort about the system. He stated that the goal in terms of
collections should be to not have to collect, and noted that this is a good risk assessment project.

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He also commented on the possibility of having conversations or written correspondence between
the CPA firms and the internal audit department or the property managers, noting that there needs
to be education of those responsible on the risks of reporting their gross rents and what
unallowable deductions might be in order to do a better job going forward. 
Following the presentation, Tammy Latham, Concessions International (CI) and Deanna
Zachrisson, Manager, Concessions Management provided comments. 
Ms. Zachrisson stated that CI has been at the Airport for many years and is a committed tenant,
and noted that the past three years have been fairly challenging for them, partially due to struggles
with a sub-tenant. 
Ms. Latham reiterated CI's commitment to correcting the internal issues which had been identified,
and stated that these will not be ongoing issues. 
Commissioner Albro commented on the internal audit department's draft work plan, which had
identified areas for proposed audits, and he raised the question of what financial implications might
be should the ones which were bumped from the draft work plan be added back to the final
workplan as it was approved. It was also noted that of the 59 audits proposed, 34 were approved. 
Commissioner Tarleton suggested that within 90 days, the Committee have a review of what it
would take to perform those additional audits in the last half of 2010, or why they might not need to
be done at this time. 
Commissioner Albro commented that he would then also like to have information regarding the
timeliness of payments. 
Commissioner Tarleton stated that she was interested in thoughts from CEO Yoshitani regarding
the accounts receivable performance at the Port.
Mr. Yoshitani commented that as the Port is a public agency, he believes there is a responsibility to
accounts payable get out as quickly as possible, especially to support small business. 
Commissioner Tarleton suggested that in 90-120 days, staff return to the Committee to discuss
ways in which tracking of accounts receivable and disbursements might happen. 
Mr. Miller noted his concern of the need to keep the focus of the internal audit department on
value-added activities. He raised the question of whether or not, now that there is a manual
tracking system which has been implemented in the AFR department, there is really a requirement
for time of the internal audit department to address this.
ADJOURNMENT 
There being no further business, the meeting was adjourned at 10:47 a.m. 
(A digital recording of the meeting is available on the Port's website.) 
Tom Albro 
Commissioner 

Mar 9 SCM Audit Min