Port of Seattle 
2014 Audit Engagement Service Plan 
(Provided to management and the Audit Committee on October 21, 2014) 











999 Third Avenue, Suite 2800 
Seattle, WA 98104 
206. 3026500

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 for the year ended December 31, 
2014 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 Circular OMB A133. 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, Law Enforcement Officer 
Reimbursement Agreement Program, and other major Federal Financial Assistance 
Programs and related internal controls and compliance in accordance with Federal 
Circular OMB A133 (Single Audit). 
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. 
Issue a management letter of recommendations and observations. 







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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 riskbased approach that requires the auditor to obtain an indepth 
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. 
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 relevant Port 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 Portspecific and industry developments that might require an expansion or 
modification of audit tests. 

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Conduct risk brainstorming meeting with our own staff as well as meetings with Port 
Commissioners, 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 Circular OMB A133 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 nonposting 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. 
Consider both quantitative and qualitative factors. 
Major program determination is made using the guidance provided by Federal Circular 
OMB A133. 
Reevaluate 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. 


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NonPosting 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 topdown approach when evaluating internal 
control starting with entitylevel controls and narrowing to controls that relate to specific 
financial statement assertions as follows: 
Obtain and assess the Port's entitylevel 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, seaport and real estate leasing arrangements and other 
operating leases in place 
Procurement, cash disbursements, and payables 
Payroll 
Capital projects 
Treasury and investments 
Debt and related accounts 
Environmental remediation liability and contingencies 
Third party management 
Financial close and reporting 
Information technology (general computer controls) 
Budget 

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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 
DavisBacon Act 
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 
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 
Capital projects 
Financial close and reporting 


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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, longterm debt, and investment accounts. For other 
accounts, we frequently use predictive analytical tests such as using specific data to 
develop expectations. 

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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. 
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 Real Estate Division 
New and significant leases at the Airport and Seaport Divisions 
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 ongoing 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 PostEmployment Benefits 
These include complex disclosure requirements and calculations performed by specialists 
which are relied upon by Port management. 

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NEW ACCOUNTING PRONOUNCEMENTS & STANDARDS 
GASB Statements that will be effective for the Port in 2014 or later and should be evaluated are: 
GASB Statement No. 67, "Financial Reporting for Pension Plans", effective for the year ended December 
31, 2014, improves financial reporting by state and local government pension plans by requiring 
additional disclosures and decisionuseful information and transparency and support plan valuations 
and funded status. This statement replaces GASB Statement No. 25. For the Port, GASB 67 will affect 
the financial reporting for the Warehouseman's Pension Trust Fund by requiring new and more 
detailed footnote disclosures and new required supplementary information. We are working with 
management to ensure that this statement is appropriately followed and implemented within the 
Port's 2014 financial statements. 
GASB Statement No. 68, "Accounting and Financial Reporting for Pensions", effective for the Port in 
2015, provides standards for measuring and recognizing liabilities, deferred outflows of resources, and 
deferred inflows of resources, and expenses. This standard will impact the Port's note disclosures and 
the accounting and reporting for the enterprise fund's pension obligation. We will work with 
management to plan for the implementation of this standard. 
GASB No. 69 "Government Combinations and Disposals of Government Operations", effective for the Port 
in 2014, and establishes accounting and financial reporting standards related to government 
combinations, such as mergers, acquisitions, and transfers of operations. This statement requires the 
use of carrying values to measure the assets and liabilities in a government merger. It also requires 
measurement of assets acquired and liabilities assumed to be based upon the acquisition value. This 
statement also provides guidance for disposals of government operations and combinations. Based on 
discussions with management, it is our understanding that this pronouncement is not applicable to the 
Port's financial statements. 
GASB No. 70 "Accounting and Financial Reporting for Nonexchange Financial Guarantees", effective for 
the Port in 2014, and improves accounting and financial reporting by state and local governments that 
extend and receive nonexchange financial guarantees. Based on discussions with management, it is our 
understanding that this pronouncement is not applicable to the Port's financial statements. 
GASB No. 71 "Pension Treatment for Contributions Made Subsequent to the Measurement Date", effective 
for the Port in 2015, addresses an issue regarding application of the transition provisions of Statement 
No. 68, Accounting and Financial Reporting for Pensions. The issue relates to amounts associated with 
contributions, if any, made by a state or local government employer or nonemployer contributing 
entity to a defined benefit pension plan after the measurement date of the government's beginning net 
pension liability. We will work with management to determine the impact of this statement on the 
Port's financial statements. 
2014 OMB Grant Reform  effective for the Port in 2015, this Uniform Guidance streamlines the federal 
government's guidance on administrative requirements, cost principles, and audit requirements for 
federal awards. This guidance is meant to provide greater transparency over the A133 process and 
impacts such areas in limiting the types of allowable costs, strengthening oversight, providing a 
consistent and transparent treatment of costs, eliminating duplicative and conflicting guidance, and 
focusing on performance over compliance for accountability. This guidance also reforms audit 
requirements which puts more emphasis on risk, increases the audit threshold from $500,000 to 
$750,000 and it slightly changes the audit consideration over a High Risk Type A and B programs. We 
will work with management to determine the impact of this statement on the Port's financial 
statements and A133 compliance with the OMB. 
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AUDIT TIMING 

AUDIT SCHEDULE                             TIMING 
Audit Planning 
Meet with your management and accounting staff to set up the      October 2014 
yearend 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 2014 
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 the audit committee to provide an overview of the     October 2014 
planned scope and timing of the audit in our engagement 
service plan. 
Meet with Port management to discuss new Port transactions or     Quarterly 
activities and new or pending accounting and auditing guidance. 
Audit Fieldwork 
Perform interim field work to perform testing of the Port's internal      October 2014 (Testing of IT 
controls and to facilitate planning for yearend audit fieldwork.      controls in November 2014 
Test certain accounts such as revenue recognition, leases,      and January 2015) 
environmental liabilities, and construction in progress. 
Perform procedures related to administration of federal awards in      October 2014 and March 2015 
accordance with Federal Circular OMB A133. 
Perform the yearend audit fieldwork of the Port's account    February to March 2015 
balances (financial statement audits and testing of Schedule of 
Federal Awards). 
Perform the audit on PFC receipts and expenditures and related     March 2015 
internal controls. 
Report Preparation 
Issue our opinion on the financial statements and schedule of Net      On or before April 30, 2015 
Revenues Available for Revenue Bond Debt Service. 
Issue Single Audit reports and PFC program audit report.             On or before June 30, 2015 
Issue the draft management letter of recommendations.             On or before June 30, 2015 
Meet with the Audit Committee and management to present     As requested; no later than 
audit results.                                              June 30, 2015 

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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. 

Jim Lanzarotta, CPA, Business Assurance Partner 
Jim has significant experience conducting audits in accordance with Government 
Auditing Standards and Federal OMB Circular A133. Jim will serve as the concurring 
review partner. The concurring review partner serves as the second partner reviewer 
of the financial statements and our reports and, as necessary, will consult on technical 
issues or key elements of the audits. 

Chris Kradjan, CPA, Moss Adams Advisory Services Partner 
Chris is a member of our Governmental Services Group and specializes as an 
Information Technology consultant. Chris will lead our audit procedures covering 
the Port's IT systems, including general computer controls. 

Kory Hoggan, CPA, Business Assurance Senior Manager 
Kory is an audit senior manager in our Governmental Services Group. Kory has over 
15 years of public accounting experience and he specializes in audits of 
governmental entities and employee benefit plans. 


Kevin Villanueva, CPA, IT Consulting Senior Manager 
Kevin Villanueva is a Senior Manager with the Information Technology Consulting 
Group and leads the firm's information security and infrastructure practice. Kevin 
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. 



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Kimberly Koch CPA, IT Consulting Senior Manager: 
Kimberly has over ten years of public accounting experience. Kimberly will serve as 
project manager for our tests of the Port's general computer controls. 


Tyler Reparuk CPA, Business Assurance Manager: 
Tyler has over five years of public accounting experience and this will be his sixth year 
serving the Port of Seattle. Tyler will serve as a manager and will spend his time 
assisting with supervision of staff in the field and managing each of the audits we 
perform for the Port. 

In addition, the following individuals will serve the Port of Seattle: 
Lisa Dion CPA, Business Assurance Senior: Lisa has over three years of public 
accounting experience and this will be her fourth year serving the Port. Lisa has 
experience in performing governmental financial statement audits and Federal Circular 
OMB A133 audits. Lisa will serve as a senior accountant and will spend her time 
assisting with the supervision of staff in the field and performing procedures related to 
the financial statement accounts and the OMB A133 audit. 
John Witt CPA, Business Assurance Staff: John has two years of public accounting 
experience and this will be his third year serving the Port. John will primarily spend 
time related to the financial statement accounts and the OMB A133 audit, and will be 
working under the supervision of other members of our audit team. 
Dan Sievers CPA, Business Assurance Staff: Dan has one year of public accounting 
experience and this will be his second year serving the Port. Dan will primarily spend 
time related to the financial statement accounts. 
Abby Barr, Business Assurance Staff: Abby is new to Moss Adams and will be working 
under the supervision of other members of the audit team. Abby will primarily spend 
time 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, will be fully integrated into our audit team in working on each of the audits. This 
will be her second 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 
Unadjusted audit differences considered by management to be immaterial 
Significant audit adjustments 
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 
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 
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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