PORT OF SEATTLE
MEMORANDUM 
DATE:       July 28, 2011 
TO:          Audit Committee 
FROM:      Tom Barnard, Audit Committee Staff 
SUBJECT:    Action steps for the Audit Committee 

Following the July 9, 2011, Audit Committee meeting, there was discussion of concrete changes 
the Audit Committee would like to approve to improve the ability of the Audit Committee to
carry out its function. This memo is intended to follow up those suggestions by formally
approving these measures. 
The Audit Committee would like an outside firm to assess the work of Internal Audit 
Department, and to formally engage in the process to determine that firm. The
engagement would include three elements: 1) The expert member of the Audit
Committee would be part of the team that develops the requirements and scoring
criteria for an RFP that would be developed for seeking the outside firm that would
carry out such work; 2) The Audit Committee would be briefed in public session on the
scoring system before the RFP was sent out; and 3) The Audit Committee would be
briefed on both the winning applicant and the other respondents to the RFP. Steps 2
and 3 would follow the same basic pattern of review and approval as was carried out in
choosing the External Financial Auditing firm. 
The Audit Committee would like to recommend a re-organization of the Internal Audit
Department by transferring the responsibility for the Concession and Lease Audits 
compliance work from the Audit Department to other management sections. The
Internal Audit Department would still periodically review the control systems
established for ensuring compliance, but that the compliance function itself would be
performed by other management entities. This could be accomplished by transferring
existing staff in the Internal Audit Department into that department; but the overall
object of this re-organization is to free up the Internal Audit Department to perform
other functions, such as Operational Audits or others that employ internal performance
metrics. 
The Audit Committee Charter will be brought into compliance with IIA and
governmental auditing standards, unless precluded by the unique nature of the
organization, as decided by the Audit Committee. This would be accomplished by
reviewing the current relevant standards listed by both the Institute of Internal Auditors
and the Government Auditing Standards (the Yellow Book), so as to get both the
requirements of public and private entities, as the Port has organizational features of
both.