INTERNAL AUDIT REPORT 

LIMITED OPERATIONAL AUDIT 
EMPLOYEE LEARNING AND DEVELOPMENT POLICY 
TUITION REIMBURSEMENT PROGRAM 


JANUARY 1, 2012- DECEMBER 31, 2013 




ISSUE DATE: MAY 20, 2014 
REPORT NO. 2014-07

INTERNAL AUDIT REPORT 
EMPLOYEE LEARNING AND DEVELOPMENT POLICY 
TUITION REIMBURSEMENT PROGRAM 
JANUARY 1, 2012  DECEMBER 31, 2013 

TABLE OF CONTENTS 


Transmittal Letter .................................................................................................................. 3 
Executive Summary ................................................................................................................ 4 
Background ............................................................................................................................ 5 
Audit Scope And Methodology ................................................................................................. 5 
Conclusion ............................................................................................................................. 6 










2 of 6

INTERNAL AUDIT REPORT 
EMPLOYEE LEARNING AND DEVELOPMENT POLICY 
TUITION REIMBURSEMENT PROGRAM 
JANUARY 1, 2012  DECEMBER 31, 2013 
TRANSMITTAL LETTER 


Audit Committee 
Port of Seattle 
Seattle, Washington 

We have completed an audit of the Employee Learning and Development Policy (HR-12), which
provides for college tuition reimbursement. We reviewed information for the period January 1, 2012 
- December 31, 2013. 
We conducted the audit in accordance with Generally Accepted Government Auditing Standards and
the International Standards for the Professional Practice of Internal Auditing. Those standards
require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit objectives. We believe that the
evidence obtained provides a reasonable basis for our findings and conclusions based on our audit
objectives. 
We extend our appreciation to the management and staff of the Human Resources and Development
Department (HRD) for their assistance and cooperation during the audit. 


Joyce Kirangi, CPA, CGMA 
Internal Audit, Director 

AUDIT TEAM                        RESPONSIBLE MANAGEMENT TEAM 
Brian Nancekivell, Senior Auditor         Gary Buchanan, HRD Director 
Jack Hutchinson, Audit Manager         Annalee Luhmann, Learning and Leadership Manager 




3 of 6

INTERNAL AUDIT REPORT 
EMPLOYEE LEARNING AND DEVELOPMENT POLICY 
TUITION REIMBURSEMENT PROGRAM 
JANUARY 1, 2012  DECEMBER 31, 2013 
EXECUTIVE SUMMARY 

Audit Scope and ObjectivesAUDIT SCOPE AND OBJECTIVES
The purpose of the audit was to determine whether management has implemented adequate controls
to ensure compliance with the Employee Learning and Development Policy (HR-12). We reviewed
information for the period January 1, 2012 - December 31, 2013. 
Background           BACKGROUND
The Employee Learning and Development Policy (HR-12) provides for college tuition reimbursement
funded and administered by HRD. Employees must submit a request one year prior to anticipated
enrollment. The employee's manager, department director, and division director must approve the
employee's request. Annually, a committee reviews all employee requests and scores them based on
available budget. The HRD Director provides final approval of the committee's recommendations. 
For employees who have completed two years of continuous employment, reimbursement is at 50% of
the tuition costs up to an annual cap of $7,500 for undergraduate study and $15,000 for graduate
study. For employees who have completed four years of continuous employment, reimbursement is
at 75%, with the same caps. 
Audit Result Summary AUDIT RESULT SUMMARY
Management has implemented adequate controls to ensure compliance with the Employee
Development and Learning Policy. 








4 of 6

INTERNAL AUDIT REPORT 
EMPLOYEE LEARNING AND DEVELOPMENT POLICY 
TUITION REIMBURSEMENT PROGRAM 
JANUARY 1, 2012  DECEMBER 31, 2013 
Background BACKGROUND 
The Employee Learning and Development Policy (HR-12) provides for college  tuition reimbursement
funded and administered by HRD. Employees must submit a request one year prior to anticipated
enrollment. The employee's manager, department director, and division director must approve the
employee's request. Annually, a committee reviews all employee requests and scores them based on
available budget. The HRD Director provides final approval of the committee's recommendations. 
For employees who have completed two years of continuous employment, reimbursement is at 50% of
tuition costs up to an annual cap of $7,500 for undergraduate study and $15,000 for graduate study.
For employees who have completed four years of continuous employment, reimbursement is at 75%, 
with the same caps. 
Reimbursement requires an itemized tuition invoice and evidence of satisfactory course completion.
The employee must attain, at minimum, a grade of "C" or its equivalent, to receive reimbursement
or avoid repayment of a tuition advance. Any employee taking graduate level courses, if separated
from the Port within two years of course completion, must repay the full amount of the tuition. 
Financial Highlights FINANCIAL HIGHLIGHTS 
TUITION REIMBURSEMENT PROGRAM FINANCIAL HIGHLIGHTS 
NUMBER OF           BUDGETED             ACTUAL
FISCAL YEAR 
PARTICIPANTS        EXPENDITURES        EXPENDITURES
2012                                        27                 $150,000                 $130,878 
2013                                        21                 180,000                 148,268
TOTAL                                     48                $330,000                $279,146 
Data Source: Human Resources Department, PeopleSoft Financials 
Audit Scope and Methodology AUDIT SCOPE AND METHODOLOGY 
We reviewed information for the period 2012 and 2013. We utilized a risk-based audit approach from
planning to testing.  We gathered information through research, surveys, interviews, observations, 
and data analysis, in order to obtain a complete understanding of the HR-12 policy and procedures. 
We applied additional detailed audit procedures to areas with the highest likelihood of significant
negative impact. To determine if management had implemented adequate   controls to ensure
compliance with the policy and procedures: 
We reviewed the participant  files maintained by HRD and the associated tracking
methodology. 
We tested a risk-based sample of 10 program participants for each year, representing 59% and
69% of program expenditures for the respective years. We determined whether : 
o   Application forms were properly approved. 
o   Expenditures were properly supported and there was sufficient proof of course
completion. 
o   Complied with the program reporting requirements. 
o   Individual expenditures reconciled to the General Ledger. 
o   Total program expenditures in the tracking methodology reconciled to the General Ledger. 
5 of 6

INTERNAL AUDIT REPORT 
EMPLOYEE LEARNING AND DEVELOPMENT POLICY 
TUITION REIMBURSEMENT PROGRAM 
JANUARY 1, 2012  DECEMBER 31, 2013 

Conclusion CONCLUSION 
Management has implemented adequate controls to ensure compliance with the Employee Learning
and Development Policy. 

















6 of 6