PORT OF SEATTLE
MEMORANDUM
DATE:    October 4,2011
TO:     Audit Committtee & CEO Tay Yoshitani
A~ I'
FROM:   Joyce Kirangi, Internal Audit Director
SUBJECT:  Survey Results on Lease and Concession Audits

Lately, there has been a lot of discussion in the Audit Committee meetings regarding whether
Internal Audit should conduct lease and concession audits. The current Audit Committee
Charter calls for Internal Audit to audit lease and concessions, and we have been operating under
the Charter directive.
Internal Audit has conducted a survey among internal audit organizations in the nation who audit
port/airport authorities.  These organizations and the Port of Seattle share similar risks as we
are in the same industry or business activities.
Our survey asked two basic questions:
1) Does your internal audit group audit both the traditional organization internal
controls and ALSOlease and concession contract compliance?
2) Does your organization have two separate and distinct audit groups: one for the
traditional internal controls and another for lease and concession audits?
The survey result is attached. We received approximately 40 responses mostly from USA. You
will notice that all respondents, except for Los Angeles World Airports, are organized the same
way as our internal audit group at the Port of Seattle.
NOTE: Internal Audit has been tracking savings and recoveries resulting from various
audits. Cumulatively, Internal Audit has suggested recovery of over $3.5 million. Most of the
audit recovery has come from lease and concession audits.
We focus more on the future savings than the past audit recovery.