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Port of Seattle Commission's Audit Committee 
Long-Term Goals and Objectives 
Main Function: 
The Port of Seattle Audit Committee Charter states in Section 1: "The audit committee
shall represent the Commission and have review and oversight authority on matters
relating to the Port's auditing process and procedures." 
Audit Committee's Statement of Purpose: 
The Audit Committee shall provide an oversight function to ensure that management
understands  the  risks  in  its  business  operations,  encourages  the  reporting  of
departmental  risk  management  practices  to  the  audit  committee,  ensures  the
coordination of the various performance, external and internal audit functions and
determines that recommended practices are implemented.
Preliminary comments on long-term goals and objectives: 
The work of the Port of Seattle Commission's Audit Committee is subject to many
uncontrollable external factors, such as the SAO's performance audit program, changes
in  business  operations,  changes  in  laws  and  regulations,  emerging  Internal  Audit
service needs and changes in management policies and structure.  However, this
document establishes goals and a direction for the Port of Seattle's audit functions,
including management's risk assessment and management control functions, which
should survive short-term pressures. This document is designed to document the views
of  the  Audit  Committee  members  as  of  2008.   As  with  any  long-term  planning
document, it is designed to establish long-term goals and objectives and will be
modified as new experience and external factors become evident. 

Audit Committee's Goals and Objectives: 
The Audit Committee will organize its work plan over the next several years to
accomplish these long-term goals: 
GOAL: Increase focus on management and program performance. 
Total  annual  audit  resources  devoted  to  program  effectiveness,  accountability  of
program compliance, performance, or management improvements will grow to over
50% of total audit resources over the next five years. The focus on audits involving
program effectiveness is important to the Audit Committee because it ties most closely
to the mission of the Port.  The largest and most costly programs such as the Seaport
and Airport operations will receive substantial attention during the next five years.
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Program management has a substantial impact on whether programs achieve their
objectives, managed within budget, on schedule and comply with laws and contractual
agreements.   Assessments of program management, in turn, provide the Port
Commission with a sense that program and resource allocation decisions are consistent
with Commission policies and authorization levels. 
Included the in the definition of audit resources is the management effort necessary to
support ongoing State Auditor's Office (SAO) performance and accountability audits and
external financial audits. Also included in the definition of audit resources is the Port's
Internal Audit Department. The Audit committee expects the Internal Audit function will
continue its current focus in the near term, but will add performance audit skills and will
increasingly utilize those skills on performance audits over time. 
Action Steps Necessary to Accomplish Goal 
The focus on program performance and accountability will be accomplished with a
significant increase in the coordination and interaction between the roles of the Audit
Committee, Internal Audit and Port management. The Audit Committee suggests that
Port management institute an enterprise risk management program to be completed
within two years.  The Internal Audit function will integrate its audit risk assessment
process with this entity-wide risk assessment program over this two year timeframe.
Senior managers will attend Audit Committee meetings to discuss the results of their
risk  assessments  and  risk  management  programs.   Senior  management  will  also
provide their assessments of how well they used audits as a management tool in
periodic presentations to the Audit Committee.  Management will report the results of
implementing audit recommendations directly to the Audit Committee. 
The Audit Committee will focus its resources in value-added areas, either in
performance improvements, internal control enhancements or efficiency matters.  The
Audit Committee will concentrate on the skills necessary to produce value from audit
activity to the organization.   There will be an emphasis on building skills related to
program evaluation and performance assessments.  This emphasis will be enhanced
through additions to Internal Audit staff with performance audit skills and background. 
In addition,  training opportunities  will be focused on the program evaluation and
performance assessment skills of current Internal Audit staff. The Audit Committee will
also participate in training programs to enhance its ability to properly function as an
oversight body for the various audit activities.  The Internal Audit function will also
develop skills to provide training to the Port's leadership group in enterprise risk
management and internal controls that prevent or mitigate risks in their respective
operations. 
GOAL: Broaden focus of internal control audit work 
Total annual audit resources devoted to strengthening internal controls and improving
financial discipline and structures will be more than 25% of total audit resources. The
audits that focus on strengthening internal controls and improving financial discipline
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and structures also will have some relationship to program effectiveness. For example,
audits that will result in recommendations for improving accounting and reporting
systems to improve the available information for management decisions has a dual
impact of addressing financial objectives and better management of programs.  The
external independent audits of the financial statements and federal awards are viewed
as an important component in this area of focus, allowing for fewer internal audits that
concentrate in this area. However, central service providers such as human resources,
legal, finance, etc. are responsible for the assessment of internal controls (in proper
relation to the assessed risks) across the organization. Internal Audit , in coordination
with external auditors, will continue to evaluate the design and operation of the internal
control structure. 
Action Steps Necessary to Accomplish Goal 
Consistent with the action steps discussed in the previous goal, management will attend
Audit Committee meetings to discuss the results of their risk assessments and risk
management programs.  This will include the results of their control structure selfassessment
and action plans. Central service providers such as human resources,
legal, finance, etc. will provide an assessment of their control structures as operated by
divisions across the organization.  Internal Audit may be involved in the assessment of
organization-wide control systems and structures. The Internal Audit function will also
develop skills to provide training to the Port's leadership group in enterprise risk
management and internal controls that prevent or mitigate risks in their respective
operations.   Training  will  include  control  structure  self-assessment  methods  and
techniques. 
All major internal control structure self-assessments will be completed within the twoyear
timeframe consistent with the enterprise risk management program previously
discussed.  In order to accomplish this goal, the scope of major systems should be
defined by the end of 2008. 
GOAL: Modify focus of revenue audits 
The Audit Committee expects that management will become more involved in managing
and monitoring lease and contract revenue and less reliant on Internal Audit to detect
under-reporting of revenues. 
While an audit focus on efficiency of operations and cost savings will eventually be less
than 20% of the total audit resources over the next several years, this is still viewed as
an important consideration to include in the overall auditing program. This portion of the
overall  audit  program  will  address  both  cost  savings  in  operating  programs  and
detection of cost savings or revenue enhancements from auditing the Port's contractors.
Considering all external and internal audits results, the Audit committee expects that all
audit resources will identify potential cost savings or revenue enhancements that will 
result in actual savings realized from implementing the recommendations.  In both the
program effectiveness and the program efficiency audits, proper stewardship  of
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taxpayer and public funds is an important consideration in allocating resources to audit
projects. 
Action Steps Necessary to Accomplish Goal 
Consistent with the action steps discussed in previous goals, management will attend
Audit Committee meetings to discuss the results of their risk assessments and risk
management programs.  This will include the results of their control structure selfassessment
and action plans related to monitoring lease and contract revenue. 
Internal Audit will continue to assess the risk of various lease and contract agreements
using factors such as size of revenue, length of time since last audited, etc. but will also
use management controls as a risk factor in determining the annual audit plan.  It is
expected that over the next several years, management monitoring mechanisms and
lessee provided lease revenue audits will replace some of the need to audit the
underlying revenues and expenses pertinent to the determination of lease and contract
revenues.  The reduction in overall audit effort in this area will allow for the expanded
effort in the performance audit area. 











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