Internal Audit Briefing
Presented to the Port of Seattle
Audit Committee and Tay Yoshitani, CEO
Joyce Kirangi, CPA
Director, Internal Audit
December 06, 2011
Agenda
• Audit Report
1. Lease and Concession Audits
None
2. Operational Audits
• Central Processing System
None
• Comprehensive Operational Audit
Airfield Operations
• Limited Operational Audit
None
• 3
rd
Party Audit
None
• Peer Review
• 2011 Work Plan Status Update
• 2012 Proposed Internal Work Plan
• Preliminary Scope Discussion for IT Risk Assessment and Performance Audit
Comprehensive Operational Audit-
Airfield Operations
Background
The Airfield Operations Department has 24 employees with an annual operating
budget of $3.5 million (exclusive of depreciation expenses). The Department is
responsible for ensuring continuing compliance with the Federal Aviation
Administration (FAA) regulations for airfield operations, operating certification,
training and wildlife management. Additionally, the Department oversees the
Airport Communications Center, and has taken the lead in implementing one of the
nation’s first Safety Management Systems at Seattle-Tacoma International Airport
(STIA).
The Department accounts for all airfield revenues, including landing fees, gate fees
and parking fees for all aircraft, in accordance with the fee schedule under Port
Tariff No. 1. During the period under audit, the Department collected at an average
of $62 million annually.
Source: PeopleSoft
Comprehensive Operational Audit-
Airfield Operations
Audit Objectives
The purpose of the audit was to determine whether management has implemented
adequate controls to ensure:
1.Revenue generated by the Airfield Operations Department is complete and
accurate
2.Professional services contracts are in compliance with requirements
3.Small and attractive items are properly safeguarded
4.Benchmarks are available and can be used to help improve airport operations
We reviewed information for the period of January 1, 2008, through December 31,
2010, including activity through the end of fieldwork in November 2011.
Comprehensive Operational Audit-
Airfield Operations
Audit Result
Clean Audit Report
2011 Work Plan Status Update
2011 Work Plan Status
audit progress attached
Preliminary 2012 Work Plan Discussion
Risk-Based Internal Audit Steps
Understand Port businesses and objectives
Discuss Port risks with Port leadership and Commissioners (see attached)
Identify potential Port wide risks
Link the risk to specific Port objectives that could be disrupted/impaired
Determine and set the scale to be used in the risk assessment
Assess and rank risk factors/drivers
2012 project selection based on risk ranking
Preliminary 2012 Work Plan Discussion
Risk-Based Internal Audit Universe
IT
Risk
Strategic/
Governance
Risk
Operational
Risk
Compliance
Risk
Accountability/
Transparency
Risk
Reporting
Risk
Business Units/Departments
X X X X
Lease and
Concession
X
Central Key Processing Systems
X X
3RD
Party Mgmt.
X X X
Federal Assistance
X X
Financial Reporting
X X X X
Capital Improvement
Program
X X X X
Commission Directives/Policies
X X
Information
Technology (IT)
X
Non
-audit Services
X X X
Preliminary 2012 Work Plan Discussion
Preliminary 2012 Audits by Type
Audit Type Count %
Lease and Concession
14
Limited Operational Audit
8
Business Units/Departments
6
3RD Party Management
3
Central Key Processing System
1
Preliminary Scope Discussion
for IT Risk Assessment and
Performance Audit
Preliminary Scope attached