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

Joyce Kirangi, CPA, Internal Audit Manager
February 27, 2009

Agenda
I.  Audit Report
I.  Lease and Concession Agreement
I.  Cruise Terminals of America (CTA)
II. Host International, Inc. and Seattle
Restaurant Associates (SRA)
II. Systems
I.  Procurement System

Audit Report  Lease and Concession
Cruise Terminals of America (CTA)
Inadequate Management Monitoring System
Untimely Closing of the Port Bank Accounts
Retroactive Employee Bonus
Disallowed deductions and expenses
$8,578 suggested recovery
Lease Not Publicly Advertised
Lack of Accountability of Port Equipment Used at the
Cruise Line Business

Audit Report -Lease and Concession
Host International, Inc. and
Seattle Restaurant Associates (SRA)
Inadequate approval System of Franchises
and Licensees
Untimely Annual Revenue Reconciliation

Audit Report  Systems
Procurement System
Major Construction (MC)
Inadequate Participation in Acquisition
Planning by Construction Contract Services
Small Works (SW)
Inadequate Documentation

Audit Report  Systems
Procurement System - continued
A, C, and S  type procurement (definition)
A-Type - one-time purchases of specific goods
and/or services
C-Type - recurring fixed-price contracts with pre-
established terms and conditions
S-Type (aka Blanket Vendor Contract ) - recurring
purchases with a specific vendor

Audit Report  Systems
Procurement System - continued
A, C, and S  type procurement (issues)
Segregation of duties
Inadequate S-type contract approval and
documentation
Ineffective Purchase Requisition (PR) signature
requirement
Insufficient procedures to ensure legitimate
vendor creation