P.O. Box 1209
Seattle, Washington 98111
www.portseattle.org
206.787.3000


APPROVED MINUTES
AUDIT COMMITTEE SPECIAL MEETING OCTOBER 6, 2015

The Port of Seattle Commission Audit Committee met in a special meeting Tuesday, October 6, 2015, in
the Commission Chambers at Pier 69, 2711 Alaskan Way, Seattle, Washington. Committee members
present included Commissioner Albro, Commissioner Creighton, and Christina Gehrke. Also present were
Dan Thomas, Chief Financial Officer; Joyce Kirangi, Internal Audit Department Director; Jack Hutchinson,
Internal Audit Manager; Peter Garlock, Chief Information Officer; Laurie Tish, Partner, Moss Adams; Tyler
Reparuk, Manager, Moss Adams; Winnie Lauer, Financial Reporting and Controls Manager; Rudy Caluza,
Director, Accounting and Financial Reporting; Matthew Mateo, Commission Policy Specialist; and Amy
Dressler, Assistant Commission Clerk.

Call to Order:
The committee special meeting was called to order at 2:03 p.m. by Commissioner Creighton.

Approval of Audit Committee Meeting Minutes of August 11, 2015:
The minutes of the Audit Committee special meeting of August 11, 2015, were approved.

Information and Communications Technology Audits  PeopleSoft Post-Upgrade Implementation
Audit, follow up
The Committee received a presentation from Mr. Garlock that contained the following information:
A solution has been implemented that terminates direct access to production data and requires a
database administrator to be concurrently involved in changes to production data.
These procedures have also been applied to the payroll and benefits module.

External Audit  Moss Adams Entrance Conference
The Committee received a presentation from Ms. Tish and Mr. Reparuk that contained the following
information:
Most of the Moss Adams team has prior experience working on the Port's audit.
If bonds are issued, the bond documents will be reviewed for consistency with the audit report.
The Northwest Seaport Alliance will have its own, independent auditor.
Pension liability is a new area of audit emphasis this year.
A final report is expected in April 2016.




Audio recordings of meeting proceedings and meeting materials are available on the Port of Seattle web site: www.portseattle.org
PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES                                      Page 2 of 4
TUESDAY, OCTOBER 6, 2015

Request for Qualification of External Audit Services for the Port's 2016 to 2010 Operating Periods
The Committee received a presentation from Mr. Caluza and Ms. Lauer that contained the following
information:
Moss Adams' contract will conclude with the completion of the 2015 audit.
The next contract term for an external auditor will be for fiscal years 2016-2020.
The contract amount will be approximately $3 million.
A new item is being added to the scope: performance of procedures to ensure compliance with
ecological regulations at Terminal 91.

The committee discussed the new financial landscape created by the Northwest Seaport Alliance. Mr.
Thomas mentioned that the NSWA will have its own audit committee, who will be responsible for selecting
an external auditor for that entity. Commissioners recommended that the request for qualifications (RFQ)
be issued with a scope modified to reflect assurance of independent audit function pertaining to the NWSA.

On motion by Commissioner Albro, seconded by Commissioner Creighton, it was moved that the
Audit Committee recommend Commission approval of the request for qualifications, modified to
include recognition of the NSWA and accompanying risks and exposures to Port of Seattle financial
statements.

Limited Operational Audit  Aviation Division Ramp Insurance Program:
The Committee received a presentation from Ms. Kirangi that included the following information:
This audit reviewed information for the period of January 1, 2014-August 31, 2015.
The purpose was to determine whether Port management controls are designed and operating
effectively to ensure effective monitoring of the insurance requirements for vehicles or other
motorized equipment accessing the airfield, and compliance with Port policies and procedures.
There was one reportable finding: Port management ramp insurance controls do not adequately
mitigate the risks of uninsured or underinsured vehicles; Submitted insurance certificates are not
processed in a timely manner; Port departments are not coordinating effectively, and insurance
monitoring of gates onto the airfield is inadequate.

Mark Coates, Senior Manager, Airfield Operations, provided the management response. Mr. Coates
reported that they are aware of insufficiencies in this program, and wanted Internal Audit to examine the
program to help provide a baseline by which improvement can be measured.

Limited Operational Audit  Purchasing Card Program:
The Committee received a presentation from Mr. Hutchinson that included the following information:
This audit reviewed information for the period of January 1, 2014-May 31, 2015.
The purpose of the audit was to determine whether department controls are adequate to ensure
compliance with Port policy requirements, and to identify possible changes to improve efficiency
and effectiveness.
There were no reportable findings.
PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES                                      Page 3 of 4
TUESDAY, OCTOBER 6, 2015

Internal Audit Proposed 2016 Budget:
The committee received a report from Ms. Kirangi that included the following information:
The 2016 budget aligns fairly closely with 2015.
Personnel is Internal Audit's biggest expense.
Sponsorship for the Association of Airline Internal Auditors Conference (AAIA), which will be held in
Seattle next year, was requested.

On motion by Commissioner Albro, seconded by Commissioner Creighton, the 2016 Internal Audit
Budget was approved, with an additional $50,000 for sponsorship of the 2016 AAIA Conference.

2015 Work Plan Addition  Puget Sound Dispatch LLC Lease and Concessions Agreement:
The committee received a presentation from Ms. Kirangi that included the following information:
Consistent with Internal Audit's mission to address emerging issues, Mr. Hutchinson requested to
add a Lease & Concession audit of Puget Sound Dispatch to the 2015 Work Plan.
Puget Sound Dispatch's contract is ending; an audit of this agreement will inform the next steps for
ground transportation at the Airport.
The methodology for this audit is unusual. Due to the inability to precisely determine Puget Sound
Dispatch's gross receipts, an average fare calculated from data available for a statistically valid
sample will be used to determine total Gross Receipts.
This agreement has not been audited previously.
Audit results are expected in November 2015.

Written materials pertaining to this item were submitted by Chris Van Dyk, Quality Ground Transportation
Management LLC, and are included here as Exhibit A, and are available for public review.

On motion by Commissioner Albro, seconded by Commissioner Creighton, the Puget Sound
Dispatch Lease and Concessions Agreement was added to the 2015 Work Plan.

2015 Internal Audit Flexible Work Plan Update:
The committee received a presentation from Mr. Hutchinson that included the following information:
In anticipation of committee approval of the Puget Sound Dispatch audit, it has already been added
to the work plan document.
Unstarted audits include the Northwest Seaport Alliance and Stormwater Utility district.
These projects were initially included in the work plan with the knowledge that the management
controls for these entities would not be finalized before the end of 2015, but also with the
knowledge that there is a lot of public interest in them.
The intention was to examine these entities with respect to the Port's interest in them, as a means
of helping implement controls at the beginning stages that will help protect the Port's interests.
These two audits were deferred to a later date.
The HIPAA audit has not begun because of Human Resources & Development staffing concerns.
The HIPAA audit was deferred to 2016.
PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES                                   Page 4 of 4
TUESDAY, OCTOBER 6, 2015

Adjournment:
There being no further business, the special meeting was adjourned at 3:35 p.m.

Tom Albro
Secretary

Minutes approved: December 1, 2015.