Internal Audit Briefing

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

Joyce Kirangi, CPA, Internal Audit Manager
April 14, 2009

Agenda
Audit Report
3rd Party Management Services Agreement
Bell Harbor International Conference
Center (BHICC)

Audit Objectives
The purpose of our audit was to determine
whether:
1) Columbia Hospitality, Inc. complied with
the provisions of the management services
agreement, as well as other applicable laws
and regulations.
2) Port management effectively monitored
the agreement with Columbia Hospitality Inc.

Conclusion
Columbia Hospitality Inc. materially complied
with the terms of the agreement; however, we
determined that the current Port monitoring
system is not effective in managing the risks
associated with the BHICC management
services agreement.
Our report has identified opportunities to
improve the effectiveness of the management
monitoring system.

Specifics
Bell Harbor International Conference Center (BHICC)
Inadequate Management Monitoring System
Lack of an Established Level of Monitoring Related to
the Third-party Employee Compensation Costs Paid
by the Port
Unsubstantiated Methodology or Support for Cost
Allocation
Improper Advance of Public Funds for Private
Activities
Improper Classification of Expenses
Ineffective Monitoring of Sales Activity to CHI and its
Affiliates