Commissioners                                             Tay Yoshitani 
Chief Executive Officer 
Bill Bryant 
Commission President 
Tom Albro                          P.O. Box 1209 
John Creighton                    Seattle, Washington 98111 
Rob Holland                       www.portseattle.org 
Gael Tarleton                          206.787.3000 

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 May 3, 2011 
The Port of Seattle Commission Audit Committee met in a special meeting Tuesday, May 3, 2011, 
in the Commission Chambers at Pier 69, 2711 Alaskan Way, Seattle, Washington. Committee
members Commissioner Albro, Commissioner Holland, and Christina Gehrke were present, as well
as Dan Thomas, Chief Financial Officer; Joyce Kirangi, Internal Audit Department Director; Tom
Barnard, Research and Policy Analyst; and Paul White, Commission Records Coordinator. 
CALL TO ORDER 
The committee special meeting was called to order at 9:05 a.m. by Commissioner Albro. 
Public Comment: 
Public Comment was received from Ms. Doris Cassan of Dollar Rent A Car, who commented on a
recent audit by the Port of Seattle that noted that Dollar Rent A Car had not reimbursed the Port for
commission on customers' payments to the rental company for fees associated with unreturned
keys, postage to return lost items to customers, and fees collected to reconcile customers' traffic
tickets for unpaid tolls. 
Approval of Minutes for April 5, 2011, Audit Committee Meeting: 
On motion by Commissioner Holland, seconded by Commissioner Albro, the minutes of the
Audit Committee Special Meeting of April 5, 2011, were approved. 
2010 Moss Adams Audit Results: 
Ms. Laurie Tish, Partner with Moss Adams LLP, summarized the following audit reports issued by
Moss Adams LLP: 
Unqualified opinion on financial statements dated April 22, 2011, covering statements of
the Enterprise Fund and the Warehousemen's Pension Trust Fund; 
Unqualified opinion on Schedule of Net Revenues Available for Revenue Bond Debt
Service dated April 22, 2011; 

Audit Committee Minutes of May 3, 2011, proposed for approval on June 7, 2011.

PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES         Page 2 of 6 
TUESDAY, MAY 3, 2011 
Audit and report on Schedule of Passenger Facility Charges (PFCs), receipts and
expenditures and related internal controls dated April 22, 2011; and 
Audit and report on Federal Financial Assistance Programs and related internal controls
and compliance ("Single Audit"). 
Ms. Tish stated that no material weaknesses were identified in these four reports, and no control
deficiency letter would be issued, although the auditor made the following recommendations: 
More robust review of airlines' quarterly PFC reports; e.g., to ensure airlines' report
responses are not left blank inadvertently; and 
Archiving East Marginal Way Program quarterly progress reports upon submission in a
central location. 
Ms. Tish noted that prior-year information technology matters were successfully resolved or in the
process of being resolved and that no new matters were identified. 
Ms. Tish commented on one finding of noncompliance related to back-funding of Federal claims
from 2007 and 2008 and failure in 2010 to verify suspended or debarred parties for the backfunded
claims. In response to Commissioner Albro, Ms. Tish explained that Moss Adams had
performed the verification and noted no questioned costs.
Ms. Tish described the following areas of audit effort: 
Review of internal control environment, including testing design and implementation of
key controls, assessing information technology controls, testing sample capital-assetsrelated
systems such as payroll, cash disbursement and procurement, and leases, and
budget and third-party transactions; 
Confirmation that management estimates are based on assumptions that conform to
relevant generally accepted accounting principles; 
Analysis of business indicators and third-party data to develop reasonable expectations
for operating revenue; 
Recalculation of Signatory Lease and Operating Agreement (SLOA) amounts; 
Review of lease accounting, including management lease review; 
Review of bonds and related accounts, including capitalized bond interest during a
construction period being rolled into the capital asset in accordance with standard
accounting principles; 
Examination of additions to and retirements from capital assets and other capitalization
policies; 
Verification of the classification of net assets as unrestricted, restricted, or invested in
capital assets; 
Review of the Warehousemen's Pension Trust Fund; 
Administration of federal awards and related administrative controls; and 
PFC Program audit, in which there were no findings noted. 


Audit Committee Minutes of May 3, 2011, proposed for approval on June 7, 2011.

PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES         Page 3 of 6 
TUESDAY, MAY 3, 2011 
In response to Commissioner Albro, Ms. Tish confirmed that loss of interest earnings on a partial
equity investment is not typically capitalized and described the requirements applicable to arbitrage
liability. 
Ms. Tish stated the following communications, as required in accordance with Generally Accepted
Auditing Standards: 
It is the auditor's responsibility to form and express an opinion about whether the
financial statements are fairly presented and to plan and perform the audit in accordance
with Generally Accepted Auditing Standards and Government Auditing Standards; 
The audit does not relieve management and the Board or the Audit Committee of its
responsibilities; 
The audit was performed in accordance with the planned scope; there were no areas
requiring deviation from the scope; 
The significant accounting policies summarized in Note 1 to the financial statements are
consistent with prior years; 
Information related to management judgments and accounting estimates have been
noted above; 
Financial statement disclosures in the notes to the financial statements were consistent,
clear, and understandable; 
There were no proposed or passed audit adjustments; 
Management's letter of representation documenting their assumptions used in the
various estimation accounts, asserting the completeness of the financial statements, and
providing the schedule of federal awards was received; 
There were no disagreements with management; 
Moss Adams is aware of no consultation between management and other independent
auditors; 
No difficulties were encountered during the audit; 
No illegal acts were noted; 
The auditor has no additional disclosures to make regarding the ability of the Port to
continue as a going concern; 
No concerns of financial statement fraud were noted in the course of performing
procedures involving interviews with Port management personnel and examination of
unusual journal entries; and 
Moss Adams is independent with respect to the Port of Seattle. 
Ms. Tish commended Port staff for their courteous, responsive, timely, and professional treatment
of the auditors and noted that the audits progressed on time in an orderly fashion. She added that
Branch Richards & Company personnel contributed approximately seven percent of the audit
hours. 
In response to Commissioner Albro, Mr. Barnard noted that the 2012 Comprehensive Annual
Financial Report (CAFR) would be released in about a week. Commissioner Albro requested time
on the June 7, 2011, Audit Committee agenda for committee questions subsequent to CAFR
review. 

Audit Committee Minutes of May 3, 2011, proposed for approval on June 7, 2011.



PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES         Page 4 of 6 
TUESDAY, MAY 3, 2011 
Selection of External Audit Services for Financial Statement, Single Audit, and Passenger
Facility Charge Audit: 
Ms. Lisa Lam, Finance Reporting and Controls Senior Manager, reported that following Committee
approval of evaluation criteria for a request for qualification (RFQ) for external audit services on
February 1, 2011, four proposals were received. She described the review process and requested
Committee approval of a request for Port Commission authorization to select Moss Adams to
perform an external independent audit of financial statements and the federal grant and PFC
programs of the Port of Seattle. 
Ms. Lam stated that deliverables of the audit services include the following: 
Independent audit and opinion on financial statements of the Port's Enterprise Fund; 
Independent audit and opinion on financial statements of the Warehousemen's Pension
Trust Fund; 
Computation of the net revenue available for revenue bond debt service; 
"Single audit" and report of federal grants awarded; and 
PFC Program audit and report. 
Ms. Lam described the process for RFQ evaluation, which was conducted in accordance with
Central Procurement Office protocol and observation by the Director of the Internal Audit
Department, and she outlined the process for finalist interviews. Ms. Lam outlined the overall
strengths of the highest ranked submission from Moss Adams. 
Regarding audit fees, Ms. Lam explained that all proposals for the entire five-year period came to
less than $3,000,000, and funds will come from existing and future Accounting and Financial
Reporting operating budgets and Port-wide non-operating budgets as appropriate. 
She concluded by adding that all proposals submitted meet or exceed the Office of Social
Responsibility's guidelines that at least ten percent of subcontracted work to be performed by small
businesses. 
In response to Ms. Gehrke, Ms. Lam stated that Moss Adams is just completing a five-year
contract with the Port as external auditor. In response to Commissioner Albro, Ms. Lam clarified
the format of the scoring summaries for submissions and interviews. 
On motion by Commissioner Holland, seconded by Commissioner Albro, the Committee
agreed to recommend to the Port Commission selection of the firm of Moss Adams as the
external independent auditors to audit the financial statements and the federal grant and
Passenger Facilities Charge programs of the Port of Seattle. 
Long-Range Goals and Objectives: 
Ms. Joyce Kirangi, Internal Audit Department Director, reported on types of audits available to the
Internal Audit Department, noting that the type of audit performed is based on the applicable audit
objective. 

Audit Committee Minutes of May 3, 2011, proposed for approval on June 7, 2011.

PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES         Page 5 of 6 
TUESDAY, MAY 3, 2011 
Ms. Kirangi described the following categories of audit: 
Financial audits, which are typically conducted by an outside firm to provide an
independent assessment of whether an organization's reported financial information is
presented fairly in accordance with applicable criteria, and may involve review of
processes applicable to internal controls, legal and regulatory compliance, and contract
or grant conditions; 
Performance audits, which measure program effectiveness relative to an organization's
stated goals and objectives or focus on economy and efficiency by addressing costs or
productivity, and may involve assessment of internal controls, compliance, and
prospective analysis; 
Attestation audits, which involve an assertion about the organization's subject matter by
a third party and therefore are not applicable to the Internal Audit Department by
definition; 
Operational audits, which assess management controls to determine their effectiveness 
and may involve evaluation of internal controls, operational strategies, processes,
policies, procedures, and measurement or monitoring systems; 
Compliance audits, which are conducted to review compliance with governing
regulations and are aimed at increasing an organization's fiscal transparency; and 
IT audits, which review and assess design and effectiveness of computer general and
application controls. 
In response to Ms. Gehrke, Ms. Kirangi described differences between attestation and operational
audits as related to lease and concession agreements, which Jack Hutchinson, Internal Audit
Manager, characterized as engaging approximately 47 percent of Internal Audit resources.
Mr. Hutchinson described the remaining 53 percent of Internal Audit efforts as comprised of various
systems audits, accountability audits, and performance audits. Ms. Gehrke asked for development
of short, common definitions to clarify internal audit terminology on a single-page resource, and
she described the Port's internal audit efforts in terms of comprehensive and limited-scope
operational audits and lease and concession audits. 
Further discussion ensued regarding the audit types represented in the Port's current internal audit
efforts and the relationship of the internal auditing process with the establishment of performance
measurements. 
Additional discussion following concerning the executive role of the Port Commission and its
delegation of authority to the Chief Executive Officer and the role of the Internal Audit Department
in fostering confidence in the organization's compliance with Commissionpolicies and informing
decision-making about appropriate thresholds for delegation of authority. 
At the request of Commissioner Albro, Ms. Gehrke described the composition and role of the
Institute of Internal Auditors (IIA) to provide professional guidance worldwide to the auditing
profession. Mr. Hutchinson stated that the Port's Internal Audit Department holds a group
membership in the IIA, which informs the performance of their duties and provides useful resources
and training opportunities. 

Audit Committee Minutes of May 3, 2011, proposed for approval on June 7, 2011.

PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES         Page 6 of 6 
TUESDAY, MAY 3, 2011 
Commissioner Albro proposed a comparison of the function of the Audit Committee to IIA
standards to identify opportunities to encourage continued development toward industry best
management practices for audit committees. He requested a briefing on this topic for the June 7,
2011, Committee meeting. 
Ms. Gehrke suggested a comparison of current Port internal audit practices using the IIA
assessment tool to identify possible opportunities for improvement and areas of IIA standards that
may not be applicable to Port operations. Mr. Thomas underscored the importance of considering
the nature of the Port's organizationin evaluating the appropriateness of IIA standards. Ms.
Kirangi pointed out the importance of applying governmental auditing standards in assessing the
Port's internal auditing functions. 
Commissioner Albro concluded by outlining the following priorities for further review by the Audit
Committee in 2011: a comprehensive overview of the audit committee generally and internal audit
specifically, use of external or special auditors as part of the Port's internal audit function, the Audit
Committee's relationship with the Port Commission, and review of the Commission's delegation of
authority. He requested action items and time lines as part of the June Audit Committee briefing. 
ADJOURNMENT 
There being no further business, the special meeting was adjourned at 10:59 a.m. 
(A digital recording of the meeting is available on the Port's website.) 

Rob Holland 
Secretary 
Minutes approved: June 7, 2011. 







Audit Committee Minutes of May 3, 2011, proposed for approval on June 7, 2011.