Port of Seattle 
2016 Audit Engagement Service Plan 
(Provided to management and the Audit Committee on October 10, 2016) 













999 Third Avenue, Suite 2800 
Seattle, WA 98104 
206.302.6500

SCOPE OF WORK 
The primary purpose of our audit engagements is to form an opinion on the fairness of presentation of
the financial statements of the Port of Seattle as of and for the year ended December 31, 2016 in
accordance with accounting principles generally accepted in the United States of America and to audit
and report on the administration of federal awards received by the Port in accordance with Federal 
Uniform Grant Guidance. The audits will be performed in accordance with auditing standards
generally accepted in the United States of America and Government Auditing Standards. 
The following summarizes the services to be provided: 
Audit and report on financial statements for both the Enterprise Fund and the Warehousemen's
Pension Trust Fund included in the Port's Comprehensive Annual Financial Report. 
Audit and report on internal control and compliance over financial reporting in accordance with
Government Auditing Standards. 
Audit and report on the Airport Improvement Program and other major Federal Financial
Assistance Program[s] and related internal controls and compliance in accordance with Federal
Uniform Grant Guidance. 
Audit and report on the schedule of Passenger Facility Charge (PFC) program receipts and
expenditures and related internal controls. 
Audit and report on the Schedule of Net Revenues Available for Revenue Bond Debt Service. 
Perform agreed upon procedures and report to the Washington Department of Ecology 
pertaining to the Terminal 91 Facility. 
Issue a management letter of recommendations and observations, if necessary. 

OUR AUDIT APPROACH 
In accordance with generally accepted auditing standards and Government Auditing Standards, our
firm utilizes a risk based approach to conduct our audits. Moss Adams performs its audit engagements
using a risk-based approach that requires the auditor to obtain an in-depth knowledge of the Port's
operations and the industry as a whole. 
Audit risk involves the risk of material misstatement in the Port's financial statements and arises
because the audit is designed to provide reasonable (not absolute) assurance that the financial
statements are free of material misstatements. The audit risk model is composed of three elements;
inherent risk, control risk, and detection risk, which must be evaluated and assessed separately, either
quantitatively or qualitatively. We assess risk at the level of high, medium, or low. 
Inherent risk represents the susceptibility of an account balance, class of transaction, or 
disclosure to material misstatement based solely on their nature; this risk exists independently
of the audit. For example, due to the complexity of the estimate, environmental remediation 
liability is an inherently risky balance. Inherent risk includes fraud risk and the risk of material
misstatement due to fraud. 

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Control risk represents the risk that a material misstatement could occur in a system or in an
assertion that will not be prevented or detected on a timely basis by the Port's structure of
internal control. Although control risk exists independently of the audit and is the responsibility
of management, we will modify our audit procedures based upon assessment of the risk. 
Detection risk represents the risk that the auditor will not detect a material misstatement that
exists in an assertion. It is a function of the effectiveness of applying our audit procedures. 
We assess audit risk at the overall financial statement level, individual account balance, transaction, or
disclosure level during the planning phase of our audit (risk assessment procedures). Our overall
judgment about the level of the risks above will affect the scope of the audit, including the nature,
timing, and extent of our audit procedures. 
Phase I - Planning 
The following risk assessment activities are performed: 
Entrance meetings with certain  Port Commissioners, management and staff to discuss
expectations, the audit process and timelines, and to obtain key strategic, financial, and
operational information. 
Observation and inspection of documents. 
Identify Port-specific and industry developments that might require an expansion or
modification of audit tests. 
Conduct risk brainstorming meeting with our own staff as well as meetings with Port
executives, management, and other personnel. 
Based on the results of the risk assessment procedures noted above, we conclude the planning phase
by performing the following: 
Define the scope of the engagement including determination of potential major programs for
the Federal Uniform Guidance and the applicable audit procedures. 
Ascertain timing of conduct and completion of audit, reporting submission deadlines, and
nature of reports to be issued. 
Design an efficient audit approach and audit programs with sufficient risk coverage. 
Establish preliminary materiality and the non-posting threshold for trivial matters noted during
the audit 
Materiality 
Materiality is the maximum level of misstatement that can be tolerated in the financial statements
without causing a reasonable person's judgment about them to be significantly changed or influenced.
We determine materiality as follows: 
Conduct preliminary analysis of financial statements to make initial judgment of materiality. 
Consider the needs and expectations of the readers of the financial statements. 
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Consider both quantitative and qualitative factors. 
Major program determination is made using the guidance provided by Federal Uniform Grant
Guidance. 
Re-evaluate materiality level throughout the engagement and conclude on final materiality level
upon completion of the audit. 
We identify all quantitative critical components to the financial statements such as total assets, net
position, capital assets, revenue, and the increase in net position. We determine the most relevant
critical component to the users of the financial statement and using a benchmark percentage, we
calculate an overall materiality amount; for example a benchmark percentage multiplied by a critical
component such as total revenues. We also utilize planning materiality to determine the extent of
applying audit procedures; for example, it can be used in connection with performing substantive
analytical procedures and in determining sample size. 
Non-Posting Threshold for Trivial Matters 
The trivial matters threshold establishes a level for which misstatements are considered to be
inconsequential to the financial statements. The trivial matters threshold is established at the planning
stage and is calculated as a percentage of planning materiality. We notify Port management regarding
all misstatements discovered in the audit and although we may consider a misstatement
inconsequential, management may elect to record an adjustment, even if it is deemed to be trivial. All
potential adjustment amounts above the trivial matters threshold are analyzed individually and in
aggregate to determine potential impact to the financial statements. 
Phase II - Assessment of Internal Control 
Internal control is a process that is designed to provide reasonable assurance over the achievement of
the Port's objectives such as reliability of the Port's financial reporting, effectiveness and efficiency of
operations, and compliance with the laws and regulations. The framework used in assessing the Port's
internal control consists of five interrelated components; control environment, risk assessment,
control activities, information and technology, and monitoring. Our firm follows a top-down approach
when evaluating internal control starting with entity-level controls and narrowing to controls that
relate to specific financial statement assertions as follows: 
Obtain and assess the Port's entity-level controls including  the information technology
environment and the effect on the internal control structure. This includes assessing the 'tone
at the top'; i.e. controls in place at the Commission and executive level. 
Identify significant accounts and processes: 
Administration of federal awards and related administrative controls 
Billings, cash receipts, and receivables 
Airport lease agreements, maritime and economic development leasing arrangements and
other operating leases in place 
Procurement, cash disbursements, and payables 
Payroll and pension liability 
Capital projects 
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Treasury and investments 
Debt and related accounts 
Environmental remediation liability and contingencies 
Stormwater utility 
Third party management 
Financial close and reporting 
Information technology (general and application computer controls) 
Budget 
Obtain copies of system, policy, and procedure documentation from various departments. We
retain these copies in our permanent working paper files and update them annually. 
Obtain knowledge of design and implementation of controls relevant to financial statement
assertions and compliance with laws and regulations that have direct and material effect on
determination of financial statement amounts. After gathering this information we perform
"walkthroughs" to verify that our understanding of the system and its controls is accurate and
that key controls exist and are operating as designed. 
Perform tests of controls that relate to financial statement assertions and perform tests of
controls and compliance related to the Port's federal awards: 
Allowable costs and activities 
Cash management 
Equipment and real property management 
Matching and level of effort 
Period of availability 
Procurement and suspension and debarment 
Program income 
Reporting 
Subrecipient monitoring 
Special tests and provisions unique to the major programs, including compliance with the
Davis- Bacon Act. 
Information Technology (IT) Systems and General Computer Controls 
Determine application systems, databases, and operating systems in scope based on the
business process walkthroughs of our financial audit team. 
Identify any application controls our financial audit team is planning to place reliance upon. 
Procurement, cash disbursements 
Payroll 
Billing 
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Capital projects 
Financial close and reporting 
Identify key IT general computing controls that support automated and application controls to
be relied upon by our financial audit team. 
Security and access 
System acquisition and implementation 
System changes/change management 
Computer operations 
Conduct walkthroughs of significant application and general computing controls to assess
effectiveness of design and implementation. 
Perform tests of IT controls and compliance. 
Phase III - Substantive Audit Procedures 
We tailor our audit programs for each balance to obtain evidence from a combination of (1) internal
control testing, (2) analytical procedures, and (3) substantive testing. The balance of evidence to be
obtained from each of the three general types of procedures is determined using an audit approach
decision model taking into account the strength of the Port's system of internal controls. 
Test of Details 
Directed testing and audit sampling are used to perform tests of certain financial statement
account balances. 
Directed testing utilizes judgment and expertise and selections are based on risk and dollar
value; we use directed testing approach for most financial statement balances where efficient. 
Random and judgmental sampling methods are utilized (method depends on population). 
Compliance with requirements of the major federal award programs is tested. 
Analytical Procedures 
In the planning phase, we perform a comparison of current and prior year results and actual
and budgetary information, as well as an analysis of the Port's major transactions during the
year. 
During substantive testing, we perform an analysis of the detail of changes to certain accounts
such as capital asset, long-term debt, and investment accounts. For other accounts, we
frequently use predictive analytical tests such as using specific data to develop expectations. 
At the conclusion of the audit, we do a holistic review of the financial statements in light of the
results of other auditing procedures and assess whether we have appropriately addressed all
critical areas. 

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Conferences and Audit Progress Reports 
We will schedule both an entrance and exit conference with the Port's Audit Committee and
management. On a weekly basis during audit fieldwork we will provide management with a status
report of progress, unusual or significant accounting issues, proposed and passed audit adjustments,
potential management letter comments, and difficulties encountered, if any. 
Phase IV - Completion of Audit and Presentation of the Audit Results 
Upon completion of substantive procedures, we assemble testing results to determine the matters that
are reportable to management and to the Audit Committee. This process entails assessing whether
there are control deficiencies, whether individually or in aggregate, which are severe enough to meet
the definition of a significant deficiency or a material weakness. We also conduct final engagement
quality control reviews and prepare required deliverables. 
Finally, we are required by auditing standards to communicate, in writing, to management and those
charged with governance, all significant deficiencies and material weaknesses noted as a result of our
audit. For minor observations, we provide information on our observations regarding controls and
various other communications either verbally or in the form of a formal management letter of
recommendations to the Port. 












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AUDIT, ACCOUNTING, AND REPORTING MATTERS 
We have highlighted certain matters of audit emphasis pertinent to the Port: 
Bond Accounts 
The bond related accounts always provide challenging audit and accounting issues. Among them are: 
New debt issuances 
Refunding, defeasances or extinguishment 
Compliance with covenants 
Capitalized interest 
Arbitrage liability 
Leases 
Leasing issues are complex and are prevalent in all the Port's lines of business. For instance, we will devote audit
effort and resources to the following: 
Real estate transactions within the Economic Development Division 
New and significant leases at the Airport 
Review of Port's controls over ongoing accounting and monitoring of existing leases 
Revenue Recognition 
Revenue recognition complexities: 
Airline lease agreements 
Other operating revenue 
Tax, PFC and federal grant receipts, and investment income 
Capital Assets 
Capital assets issues and related accounts: 
Capitalization policies and classification of closed and on-going projects 
Asset retirements and demolition 
Project costs and overhead allocation 
Depreciation expense 
Impairment analysis 
Environmental Remediation Liability 
Environmental remediation complexities include: 
Estimation by site of future liabilities and related expense 
Asbestos remediation efforts 
Superfund site remediation efforts 
Capital vs. expense classification 
Pension Plans and Other Post-Employment Benefits 
These include complex disclosure requirements and calculations performed by specialists which are relied upon
by Port management. 


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Northwest Seaport Alliance 
The accounting and reporting requirementsrelated to the Northwest Seaport Alliance.  We will coordinate our
efforts with the management of each port and the independent auditors for the Northwest Seaport Alliance to
avoid duplication of efforts. 

NEW ACCOUNTING PRONOUNCEMENTS & STANDARDS 
GASB Statements that will be effective for the Port in 2016 or later related to Pensions or Other Post-
Employment Benefits which should be evaluated are: 
GASB No. 74 "Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans".  This Statement
results from a comprehensive review of the effectiveness of existing standards of accounting and financial
reporting for all postemployment benefits (pensions and OPEB) with regard to providing decision-useful
information, supporting assessments of accountability and interperiod equity, and creating additional
transparency. This statement is effective for the Port in 2017. 
GASB No. 75 "Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions". This
Statement replaces the requirements of GASB Statement No. 45, Accounting and Financial Reporting by Employers
for Postemployment Benefits Other Than Pensions. Among other things, Statement No. 75 requires governments to
report a liability on the face of the financial statements for the OPEB that they provide and requires governments
in all types of OPEB plans to present more extensive note disclosures and required supplementary information
about their OPEB liabilities. This statement is effective for the Port in 2018. 
GASB No. 78 "Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans". Effective for
the Port in 2016, this Statement amends the scope and applicability of GASB 68 to exclude pensions provided to
employees of state or local governmental employers through a cost-sharing multiple-employer defined benefit
pension plan that: (1) is not a state or local governmental pension plan; (2) is used to provide defined benefit
pensions both to employees of state or local governmental employers and to employees of employers that are
not state or local governmental employers; and (3) has no predominant state or local governmental employer
(either individually or collectively with other state or local governmental employers that provide pensions
through the pension plan). This Statement establishes requirements for recognition and measurement of pension
expense, expenditures, and liabilities; note disclosures; and required supplementary information for pensions
that have the characteristics described above. We have been working with management to determine the impact
of this statement on the Port's financial statements. 
GASB No. 82 "Pension Issues- an amendment of GASB Statements No. 67, No. 68, and No. 73". This Statement
addresses the following, among other things: (1) the presentation of payroll-related measures in required
supplementary information, (2) the selection of assumptions and the treatment of deviations from guidance in
Actuarial Standards of Practice for financial reporting purposes, and (3) the classification of payments made by
employers to satisfy plan member contribution requirements. The Statement is designed to improve consistency
in the application of the pension standards by clarifying or amending related areas of existing guidance. This
statement is effective for the Port in 2017. 
GASB Statements that will be effective for the Port in 2016 or later related to other matters which should be
evaluated are: 
GASB No. 72 "Fair Value Measurement and Application". Effective for the Port in 2016, the statement addresses
accounting and financial reporting issues related to fair value measurements. The definition of fair value is the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. This Statement provides guidance for determining a fair value
measurement for financial reporting purposes. This Statement also provides guidance for applying fair value to

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certain investments and disclosures related to all fair value measurements. We have been working with
management to determine the impact of this statement on the Port's financial statements. 
GASB No. 76 "The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments".
Effective for the Port in 2016, this Statement reduces the GAAP hierarchy to two categories of authoritative GAAP
from the four categories under GASB Statement No. 55, The Hierarchy of Generally Accepted Accounting Principles
for State and Local Governments. The first category of authoritative GAAP consists of GASB Statements of
Governmental Accounting Standards. The second category comprises GASB Technical Bulletins and
Implementation Guides, as well as guidance from the AICPA that is cleared by the GASB. The Statement also
addresses the use of authoritative and non-authoritative literature in the event that the accounting treatment for
a transaction or other event is not specified within a source of authoritative GAAP. 















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AUDIT TIMING 

AUDIT SCHEDULE                             TIMING 
Audit Planning 
Meet with the audit committee to provide an overview of the     October 2016 
planned scope and timing of the audit in our engagement
service plan. 
Meet with management and accounting staff to set up the year-end     October 2016 
audit timeline, identify and resolve pertinent issues, perform a risk
assessment, and address any concerns of management or members
of the audit committee or Port Commission. 
Provide management with a detailed comprehensive list of account     October 2016 
analyses and other materials to prepare prior to the start of the
audit. Work closely with those involved in the audit process to
clearly identify roles and responsibilities during the audit. 
Meet with Port management to discuss new Port transactions or     Quarterly (or when needed) 
activities and new or pending accounting and auditing guidance. 
Audit Fieldwork 
Perform interim field work to perform testing of the Port's internal     October 2016 
controls and to facilitate planning for year-end audit fieldwork.
Test certain accounts such as revenue recognition, leases,
environmental liabilities, and construction in progress. 
Perform procedures related to administration of federal awards in     October 2016 and March 2017 
accordance with Federal Uniform Guidance. 
Perform the year-end audit fieldwork of the Port's account    March and April 2017 
balances (financial statement audits and testing of Schedule of
Federal Awards). 
Perform the audit on PFC receipts and expenditures and related     March 2017 
internal controls. 
Report Preparation 
Issue our opinion on the financial statements and schedule of Net     On or before April 28, 2017 
Revenue Available for Revenue Bond Debt Service. 
Issue Single Audit reports and PFC program audit report             On or before April 28, 2017 
Issue Agreed Upon Procedures report and the management letter     On or before May 31, 2017 
of recommendations. 
Meet with the Audit Committee  and management to present    As requested; no later than
audit results.                                              June 30, 2017 

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MOSS ADAMS AUDIT TEAM 
The management team serving on our audits of the Port of Seattle is as follows: 

Laurie J. Tish, CPA, Business Assurance Partner 
Laurie is our firm's national practice leader for Government Services. Laurie has
specialized in serving governmental entities since she began her career in public
accounting over 30 years ago. Laurie will serve as your lead client service partner,
overseeing all projects we perform for the Port. 


Olga Darlington, CPA, Business Assurance Partner 
Olga  specializes in serving governmental entities and has significant experience
conducting audits in accordance with Government Auditing Standards and Federal
Uniform Guidance. Olga has over 15 years of public accounting experience and will
serve as the concurring engagement reviewer. The concurring engagement reviewer 
serves as the secondary review of our audit plan, the financial statements and our
reports and, as necessary, will consult on technical issues or key elements of the audits. 

Kimberly Koch, CPA, IT Consulting Partner
Kim has over 15 years of public accounting experience, specializing in tax exempt
and governmental entities. Kim's experience includes conducting SOC examinations,
performance audits, IT compliance attestation services, and internal control
assessments. Kim will serve as project manager for our tests of the Port's general and
application computer controls. 


Kevin Villanueva, CPA, IT Consulting Director 
Kevin Villanueva leads the firm's information security and infrastructure practice.
Kevin is a Qualified Security Assessor as designated by the PCI Security Standards
Council and has over 16 years of experience in information technology with industry
specialization in municipal enterprises. Kevin will serve as an additional reviewer for
our IT procedures and will oversee or perform procedures related to IT security
matters. 



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Tyler Reparuk, CPA, Business Assurance Manager
Tyler has seven years of public accounting experience and this will be his seventh 
year serving the Port of Seattle.  Tyler has experience in performing governmental
financial statement audits. Tyler will serve as a manager and will spend his time
reviewing the work performed by staff in the field andmanaging each of the audits 
we perform for the Port. 

Lisa Dion, CPA, Business Assurance Manager
Lisa hasalmost six years of public accounting experience and this will be her sixth 
year serving the Port. Lisa has experience in performing governmental financial
statement audits and Federal Uniform Guidance audits. Lisa will serve as a manager
and will spend her time assisting with the supervision of staff in the field and
managing the audits of the Port. 


Blake Thomas, CPA, IT Consulting Audit Manager 
Blake has experience in governance, risk management, and compliance with a strong
background in technology. Blake will spend his time conducting the general and
application IT control test procedures as part of our assessment of the Port's controls
related to the audit. 


In addition, the following individuals will serve the Port of Seattle: 
Abigail Barr, Business Assurance Senior: This will be Abigail's third year serving the Port. Abigail will
primarily spend time on audit procedures related to the financial statement accounts. 
Anna Waldren, Business Assurance Senior: Anna has two years of public accounting experience. Anna
has experience with tax exempt entities and Federal Uniform Guidance audits. Anna will spend time
working on both the financial statement and the compliance audits. 
Krista Gregory, Business Assurance Staff: This will be Krista's second year serving the Port. Krista will
primarily spend time on audit procedures related to the financial statement accounts. 
Branch Richards & Co, Subcontractor: We have engaged Branch Richards & Co., a small business
initiative firm, to serve as our subcontractor. Fiona Deng, experienced staff, and Larry Bussard, manager, 
will be fully integrated into our audit team in working on each of the audits. This will be Fiona's third year
serving the Port and Larry's first year serving the Port. 


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COMMUNICATIONS TO AUDIT COMMITTEE 
Auditing standards require the auditor to communicate certain matters to the Audit Committee that
may assist in overseeing management's financial reporting and disclosure process. 
Auditor's responsibilities under generally accepted auditing standards 
Other documents containing audited financial statements 
Critical accounting policies and practices 
Difficulties encountered when performing the audit, if any 
Unadjusted audit differences considered by management to be immaterial, if any 
Significant audit adjustments, if any 
Disagreements with management, if any 
Representations requested of management 
Judgments about the quality of accounting and sensitive estimates 
Adoption of, or a change in an accounting principle 
Method of accounting for significant unusual transactions or controversial or emerging areas 
Fraud and illegal acts, if noted 
Material weaknesses in internal control 
Major issues discussed with management prior to retention 
Ability to continue as a going concern 
Legal, regulatory, or contractual requirements not encompassed in the current engagement 
Consultation with other accountants, if any 
Independence of Moss Adams 
At the conclusion of our audits, we will present our reports, the results of our audit and the required
communications noted above, to the Audit Committee. 




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