PORT OF SEATTLE AUDIT COMMITTEE CHARTER 

Purpose and Authority 
The Audit Committee is a standing committee created by the Seattle Port Commission.
Its general purpose is to represent the Commission and have review and oversight
authority on matters relating to the Port of Seattle auditing process and procedures. It will
assist the Port of Seattle Commission in fulfilling its oversight responsibilities for: 
The integrity of the Port's financial statements, 
The effectiveness of the Port's internal control system over financial
reporting, compliance and operations, 
The periodic performance audits to be conducted on Port of Seattle operations,
programs, activities and business processes, 
The independent auditor's qualifications and independence, and 
The performance of the Port's internal audit function and independent
auditors.
In carrying out these responsibilities, the Audit Committee shall determine that any
audits, which are required to be conducted under the United States Government 
Accountability Office's Government Auditing Standards, are conducted in accordance
with those standards. The Audit Committee shall provide opportunities for auditors to
discharge their responsibilities for communication with those charged with
governance as required under those standards. 
The Audit Committee is empowered to seek any information it requires from Port of
Seattle employees on departmental audit matters, all of whom are directed to
cooperate with the Committee's requests. The Committee shall keep the CEO
apprised of all such requests. 
If the committee determines that in order to meet its responsibilities it requires the
independent services of an outside advisor or consultant having expertise in financial
reporting, auditing and internal controls, it may propose the retention of such advisor
or consultant to the Commission for approval. 
Duties 
The Audit Committee will 
Review with the Director of Internal Audit Department the plans, activities,
staffing, and organizational structure of the internal audit function, including
coordination of audit effort with the external auditors. Audit Committee
responsibilities will include: 

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o  Formally approve the Director of Internal Audits annual audit plan. The
annual plan will include which departments, vendors, agreements, leases,
and other areas that to be audited by the Director of Internal Audit and
audit staff.
o  Review the findings and recommendations of internal audits conducted of
these areas at the Port of Seattle, in regards to financial compliance,
internal controls, performance and efficiency.
o  Monitor the progress of the internal audit function against its long-term
goals and objectives. 
o  Elicit any recommendations of the improvement of such internal controls
or particular areas where new or more detailed controls or procedures are
desirable. Schedule and hear reviews of these improvements presented by
Port of Seattle staff as deemed necessary. 
o  Make formal recommendations to the Executive for increases in Internal
Audit Department functions and capabilities. 
o  Make formal recommendations to the Port of Seattle Commission to
request increases to the Internal Audit Department's annual budget. 
Review with the Port's External Auditors: 
o The independent auditors' annual audit of the Port's financial statements,
as well as related notes and management analysis of the findings. 
o  The management letter and the schedule of unadjusted differences. 
o  The independent auditors' judgments about the quality of the Port's
accounting principles as applied in its financial reporting. 
o  The independent auditors' single audit of the federal grant awards
administered by the Port. 
The Audit Committee shall review periodic performance audits conducted on Port
of Seattle operations, programs, activities and business processes. In carrying out
these responsibilities, the Audit Committee shall: 
o  Encourage discussion between management, the Commission and other
stakeholders in order to identify future potential areas of performance
audit focus. 
o  Provide recommendations to the Commission regarding specific audit
areas for consideration, including suggested audit objectives, scope and
evaluation criteria. 
o  If necessary, and only upon Commission approval, solicit proposals from
independent auditing firms based on the approved performance audit
objectives, scope and criteria, and recommend an independent auditing
firm for appointment by the Commission if, after consulting with the
Internal Audit Manager, it is determined that outside resources are
necessary. 

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o  Report the results of such audits to the Commission when completed. 
Review with the Washington State Auditor's Office (SAO) any financial, 
accountability or performance audits conducted on the Port of Seattle. In carrying 
out these responsibilities, the Audit Committee shall: 
o  Encourage any SAO performance audits to include an entrance and exit
conference with the Audit Committee. 
o  Review final audit findings and recommendations including management's
response and analysis. 
o  Reviews actions taken by Port of Seattle staff in response to final
recommendations of any SAO performance audit. 
Discuss with management the Port's major policies with respect to risk assessment
and risk management. 
Provide an annual report to the Commission that describes how the Audit
Committee has discharged its duties and met its responsibilities. 

Internal Responsibilities 
The Audit Committee will: 
Approve one-year and three-year goals and objectives for the Audit Committee
and monitor progress in achieving those goals and objectives. 
Establish annual goals and objectives for the Audit Committee that are consistent
with its long-term goals and objectives and monitor progress in achieving those
goals and objectives. 
Review and assess the Audit Committee Charter annually, requesting
Commission approval for proposed changes. 

Composition 
The Audit Committee will consist of at least two (2) members of the Port of Seattle
Commission and one (1) public member approved by the Commission for a term of three
(3) years. Port Commission members of the audit committee, as well as the committee
chair, will be selected by the Commission President at the beginning of each calendar
year. 
The public member will be recommended by the Audit Committee for appointment and
confirmation by the Commission. The public member may be removed during his or her
term by the Commission President. 

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Each committee member will be independent of Port management and any external audit
firm. The public member must have the following qualifications: 
An understanding of generally accepted accounting principles (GAAP) and
financial statements, 
Experience in the preparation or auditing of the financial statements of
comparable public entities, 
Experience in the application of GAAP in regards to estimates, accruals and
reserves, 
Experience with internal controls, and 
A basic understanding of how the Port of Seattle's Audit Committee functions. 
The public member will serve as an advisor to the audit committee and is not considered
a voting member of the committee for the purposes of quorum determination or voting on
any official business of the committee. 

Meetings 
The committee will meet at least four times a year, with authority to convene additional
meetings, as circumstances require.
All committee meeting are open public meetings.
A quorum of the committee is required to conduct official committee business. A
quorum is defined as a majority of voting members. 
The committee will invite members of management, auditors or others to attend meetings
and provide pertinent information, as necessary. 
Meeting agendas will be prepared and provided in advance to members, along with
appropriate briefing materials. Minutes will be prepared. 






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