Internal Audit Briefing 

Presented to the Port of Seattle 
Audit Committee and Tay Yoshitani, CEO 

Joyce Kirangi, CPA 
Director, Internal Audit 
March 6, 2012

Agenda 
Audit Report 
1.  Lease and Concession Audits 
Reissued - Cruise Terminals of America (CTA) with an addendum to reflect Seaport Management
Supplemental Information 
2.  Operational Audits 
Central Processing System 
None 
Comprehensive Operational Audit 
Aviation Noise Programs 
Limited Operational Audit 
None 
3rd Party Audit 
None 
Briefings/Updates

Concession and Lease Audit 
Cruise Terminal of America (CTA) 

Internal Audit exited the CTA audit at the January Committee meeting
with the following three audit findings: 
1. Cruise Terminals of America (CTA) did not report gross revenues in accordance with the
lease agreement. 
2. CTA did not fully comply with its lease agreement with the Port of Seattle and certain
multi-tier service arrangements hindered the port's understanding of parking/shuttle
costs. 
3. Port management did not properly administer the terms of the CTA agreement. 
At the request of the Committee, Seaport Management has provided
supplemental information related to the findings.

Comprehensive Operational Audit 
Aviation Noise Programs 

Background 
The Aviation Division's Noise Programs with six FTEs in the Community Development group is
responsible for the following two noise programs at Sea-Tac: 
Noise Remedy 
The program provides sound insulation to significantly reduce the aircraft noise. 
Noise Abatement 
The program reduces and manages aircraft noise through a variety of programs
including, in flight procedures, engine maintenance run-up rules. 
Below are department expenses for the last two years: 
2010           2011 
Salaries and Benefits                         $557,166          $579,536 
Outside Services                           740,353           420,425 
Others                                  64,618           35,838 
Total Operating before Capital Charges           $1,362,137        $1,035,799 
Source: PeopleSoft

Comprehensive Operational Audit 
Aviation Noise Programs 

Audit Objectives 
The purpose of the audit was to determine whether : 
1.   The monitoring on approved programs from the 2002 Part 150 Study is effective
in the following specific areas: 
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. 
The current Part 150 Study professional services contract payments are in
compliance with the scope and deliverables. 
2.  The funds from the Port's tax levy contributed to the Aviation High School are
effectively monitored. 
The scope of the audit covered the period January 1, 2010, through December 31, 2011.

Comprehensive Operational Audit 
Aviation Noise Programs 

Audit Result 
One Audit Finding 
Inadequate Monitoring of Port's Tax Levy Contributions to the Aviation High
School 
This finding was also recently reported by the Washington State Auditor's 
Office  (Report  No.  1007272,  released  Feb.  27,  2012).  The  finding  was
communicated to the Port Commission and Port Leadership, and the Port has 
already responded to the audit finding. Accordingly, we are not repeating the 
finding again in our audit report. 
Note: Aviation Noise Programs management has developed further detailed 
oversight monitoring procedures that are incorporated in this report.

Briefing/Updates 


Internal Audit Department Policy/Procedure Updated based on 2011
Government Auditing Standards 
Proposed Internal Audit Department Charter 
Association of Local Government Auditors (ALGA) Peer Review 
RFP for Enterprise Technology Risk and Performance Assessment 
Response Due by 3/15/2012