Commissioners                                             Tay Yoshitani 
Gael Tarleton 
Chief Executive Officer 
Commission President 
Tom Albro                          P.O. Box 1209 
Bill Bryant                           Seattle, Washington 98111 
John Creighton                      www.portseattle.org 
Rob Holland                          206.787.3000 
An audio recording of the meeting proceedings and meeting materials are available on the Port of Seattle
web site - www.portseattle.org. 
APPROVED MINUTES 
AUDIT COMMITTEE SPECIAL MEETING MARCH 6, 2012 
The Port of Seattle Commission Audit Committee met in a special meeting Tuesday, March 6, 2012, in the
Commission Chambers at Pier 69, 2711 Alaskan Way, Seattle, Washington. Committee members present
included Commissioner Albro, Commissioner Bryant, and Christina Gehrke. Also present were Tay
Yoshitani, Chief Executive Officer; Dan Thomas, Chief Financial Officer; Joyce Kirangi, Internal Audit
Department Director; Jack Hutchinson, Internal Audit Manager; Mike McLaughlin, Director of Cruise and
Maritime Operations; Tom Barnard, Research and Policy Analyst; and Katherine Blair, Commission
Records Specialist. 
Call to Order: 
The committee special meeting was called to order at 9:05 a.m. by Commissioner Albro. 
Commissioner Albro welcomed Commissioner Bryant as the new member of the Audit Committee. 
Approval of Audit Committee Meeting Minutes of January 10, 2012: 
On motion by Commissioner Bryant, seconded by Commissioner Albro, the minutes of the Audit
Committee special meeting of January 10, 2012, were approved. 
Lease and Concession Audit  Reissued Cruise Terminals of America: 
Mr. McLaughlin noted the financial reporting problem that was identified in the audit has been corrected. 
He reported that since the audit was reported at the January 10, 2012, Committee meeting, Cruise
Terminals of America (CTA) and the Port of Seattle are close to finalizing a settlement agreement that is
considered fair and reasonable to both parties, and will be brought before the full Commission. 
Comprehensive Operational Audit  Aviation Noise Programs: 
Mr. Hutchinson stated that an important aspect of the risk assessment is the work of other auditors.  He
noted during one of the weekly updates by the State Auditor's Office (SAO) during the SAO's 2011
performance and accountability audit of the Port the Internal Audit department became aware of some
concerns with Aviation Noise Programs' monitoring procedures.  He commented that those concerns
became a factor when performing the risk assessment to determine which audits to complete in 2012. Mr.
Hutchinson stated the audit objectives as follows: 
Monitoring of approved programs from the 2002 Part 150 Study is effective in the following
specific areas:



PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES         Page 2 of 3 
TUESDAY, MARCH 6, 2012 
Expenditures by the Noise Programs department for residential and school insulation
programs are appropriate and accurate; 
Processing of applications for residential insulation is efficient and timely; and 
The current Part 150 Study professional services contract payments are in compliance with
the scope and deliverables; and 
The funds from the Port's tax levy contributed to Aviation High School are effectively monitored. 
Mr. Hutchinson noted that the department has adequate controls in regard to the Part 150 study, but the
funding efforts relating to Aviation High School were found to be inadequately monitored.  He stated that
because the SAO has already reported on the finding the Internal Audit department is not repeating the
finding.  In response to Commissioner Bryant, Mr. Hutchinson clarified that there needs to be a better
system for monitoring funds given to Aviation High School in the future, but there was no finding of
misappropriation of funds.  Commissioner Albro asked what monitoring system was in place and what
effective monitoring would look like. Mr. Hutchinson noted that the funds were transferred to the district,
but there was no follow-up on whether the funds were spent appropriately. Mr. Yoshitani stated the finding
has implications for future money transfers to other projects, such as the Alaskan Way Viaduct.  He noted
that future investments by the Port will need to have clear expectations on how the money will be spent and
need to be monitored accordingly.  Commissioner Albro stated future agreements should include how the
funds will be monitored and a solution in the event that intent of the agreement is not met. 
Update on Peer Review for Internal Audit Department: 
Ms. Kirangi reported that the Internal Audit department follows the Government Auditing Standards (Yellow
Book).  She stated that the Association of Local Government Auditors (ALGA) has been contacted to
conduct the peer review. The ALGA will conduct two peer reviews, a Yellow Book review and a review in
accordance with the International Standards for Internal Auditing (Red Book).  She noted that the Yellow
Book review will be used to evaluate the performance of the Internal Audit department, whereas the Red
Book review will be used as a tool when the Committee considers adopting portions of the Red Book
standards.  Ms. Kirangi reported that the Internal Audit department is on the schedule for the ALGA to
perform the review in July.  In response to Commissioner Albro, Ms. Kirangi stated that there will be one
team from the ALGA that will conduct both reviews simultaneously, but there will be two separateletters. 
She noted that the review will take about a week.  Ms. Kirangi stated that the ALGA should be able to
report back in August. 
Update on RFP for Enterprise Technology Risk and Performance Assessment: 
Ms. Kirangi noted that the Internal Audit department does not have the internal expertise to complete an
Enterprise Technology Risk and Performance Assessment, so the department is working with the Central
Procurement Office to hire an outside consultant to perform the work. She stated that the scope of work
had previously been approved by the committee. She reported that a request for proposal was advertised 
and the responses are due March 15, 2012.  Ms. Kirangi responded to Commissioner Albro that the
Internal Audit department will be back to brief the Committee and recommend a consultant for selection in
either April or May. 
Discussion of Internal Audit Department Charter: 
Mr. Barnard presented the current version of the Internal Audit department charter and noted that the
charter is for the Internal Audit department, not the Audit Committee. Commissioner Albro commented he

PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES         Page 3 of 3 
TUESDAY, MARCH 6, 2012 
would like to have the results of the peer review before discussing the Internal Audit department charter in
depth as the peer review will inform the content. 
Ms. Kirangi stated that the Internal Audit department has been using the charter for several years, although
it has never been formally adopted by the committee.  She noted the Yellow Book does not require a
charter, but the Red Book does require internal audit departments to have a charter.  Ms. Kirangi
commented that the Internal Audit department charter does not contradict the Audit Committee charter. 
Commissioner Albro reiterated that he would like to make sure the charter included input from the peer
reviews.  Ms. Gehrke asked if management has reviewed the charter.  Ms. Kirangi responded that the
charter hasn't been shared as a separate document with management. 
Adjournment: 
There being no further business, the special meeting was adjourned at 9:40 a.m. 

Bill Bryant 
Minutes approved: May 15, 2012