P.O. Box 1209

Seattle, Washington 98111

www.portseattle.org; 206.787.3000

APPROVED MINUTES

AUDIT COMMITTEE SPECIAL MEETING

September 19, 2024

The Port of Seattle Commission Audit Committee met in a special meeting Thursday, September 19, 2024.

The meeting was held in the Commission Chambers located at the Port of Seattle Headquarters Building,

2711 Alaskan Way, Seattle, WA, and virtually via Microsoft Teams. Committee members present

included Commissioner Ryan Callins, Commissioner Toshiko Hasegawa, and Public Member Sarah

Holmstrom (non-voting).

1. Call to Order:

The committee special meeting was called to order at 10:00 a.m. by Commissioner Hasegawa. The agenda

was approved without objection.

*Internal Audit Department presentation contains information for Agenda Items 4 through 6.

2. Approval of Audit Committee Meeting Minutes of June 20, 2024

The minutes of the Audit Committee special meeting of June 20, 2024, were approved without

objection.

EXTERNAL AUDITS

3. Office of the Washington State Auditor – Accountability Audit Entrance Conference 2023

Presenters:

Joseph Simmons, Program Manager

Sonia Khokhar, Assistant State Auditor

Maddie Frost-Shaffer, Assistant Audit Manager

The Office of the Washington State Auditor presented regarding the accountability entrance audit, reviewing

January 1, 2023 through December 31, 2023, to examine the management, use and safeguarding of public

resources to ensure there is protection from misuse and misappropriation; and to evaluate whether there is

reasonable assurance for adherence to applicable state laws, regulations and policies and procedures, using

a risk-based audit approach for the Port.

PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES

THURSDAY, SEPTEMBER 19, 2024

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Discussion ensued regarding the functioning of an external auditor and the differences between internal

audits, external audits, and best practices.

Members of the Committee thanked the State Auditor’s Office team for their entrance presentation.

UPDATES AND APPROVALS

4. Internal Audit Overview and Initiatives

Presenters:

Glenn Fernandes, Director, Internal Audit

Director Fernandes overviewed the Internal Audit department organization; spoke regarding 2025 major

departmental initiatives including development of an information technology audit plan that focuses on

incident response and disaster recovery and implementation of the Internal Audit Outreach Program.

5. Approval of 2025 Proposed Budget

Presenters:

Glenn Fernandes, Director, Internal Audit

Director Fernandes overviewed a chart of capitalized outside services, new budget requests, and the 2025

proposed budget.

Discussion ensued regarding if the 2024 actual budget will align with budget projections, specifically

regarding department vacancies. Discussion also took place regarding examples of a promotional expense

for Internal Audit and if salaries and benefits changes take into account the new Port compensation program.

The motion, to recommend approval of the 2025 proposed budget, passed without objection.

In favor: Calkins and Hasegawa (2)

Opposed: (0)

6. 2024 Audit Plan Update

Presenters:

Glenn Fernandes, Director, Internal Audit

Director Fernandes overviewed the status of the 2024 Audit Plan, going over completion timelines, items

added (including ‘partner in employment’), and issuance of the audit report anticipated in November. The

Internal Audit Capital GC/CM continuous audits process was also discussed. Director Fernandes noted

information technology audits delayed to 2025 due to the recent Port network outage.

The motion, to approve the 2024 Audit Plan update, passed without objection.

In favor: Calkins and Hasegawa (2)

Opposed: (0)

PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES

THURSDAY, SEPTEMBER 19, 2024

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PERFORMANCE AUDITS

7. Aqueous Film Forming Foam (AFFF) Transition

Presenters:

Glenn Fernandes, Director, Internal Audit

Nikita Goyal, Senior Internal Auditor

The presentation addressed:

• audit scope through August 15, 2024; to include the fire department and airport facilities that use

AFFF;

• evaluations and reviews conducted during the audit;

• the fire department’s transition to PFAS‐Free Firefighting Foam (F3), with decontamination of

Aircraft Rescue and Fire Fighting (ARFF) vehicles in August 2024;

• Consolidated Rental Car Facility (CRCF) in the early stages of transitioning to water sprinkler

systems;

• Delta Airlines exploring water sprinkler systems for their hangar; and

• Alaska hangar, PACCAR hangar, Seattle Airport Fuel Farm ‐ no definitive transition plans provided

to-date;

• State and Federal regulations applicable to Class B firefighting foam and approval for the use of F3

foam;

• audit ratings, findings, and recommendations; and

• management’s responses to issues identified.

Discussion ensued regarding:

• the non-major leak occurring at Alaska Hanger that went unreported until found;

• if people entering spaces or using hazmat materials prepared with the correct equipment;

• understanding the scope of where PFAS is present;

• knowing when recommendations have been implemented and timelines associated with

implementation;

• the status of the Port – in compliance with all regulations related to the issue;

• Port actions to work with the Department of Ecology and the Legislature to address disposal of

PFAS issues;

• providing a briefing to the Commission regarding the state of litigation around PFAS;

• development of best practices and training regarding the issues; and

• understanding the needs around management of F3 foam.

Members of the Committee thanked the Internal Audit Department for their presentation and audit, and

management for their response.

8. TSE Phase 2 Bollards and ADA Ramps

Presenters:

Glenn Fernandes, Director, Internal Audit

Kerem Onat, Senior Internal Auditor

PORT COMMISSION AUDIT COMMITTEE MEETING MINUTES

THURSDAY, SEPTEMBER 19, 2024

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The presentation addressed:

• the scope of the TSE Phase 2 Bollards and ADA Ramps project – to enhance accessibility and

safety in main terminal arrivals, departures curbsides, the main garage at the pedestrian sky bridge

entrances, and the courtesy vehicle plaza;

• change orders associated with project budget overages;

• project completion anticipated by September 30, 2024;

• project delay timeline;

• audit finding regarding the failure to verify all required insurance coverages before project

commencement risked non-compliance with contractual terms, potentially leading to disputes,

delays, or increased costs;

• recommendation to following the Port standard operating procedure to ascertain that all insurance

documentation is obtained prior to project commencement;

• the need for the Port to have created a change order for additional joint sealant work prior to work

starting and the audit recommendation to follow the standard operating procedure to ensure that

no additional work commences without an approved not-to-exceed change order in place; and

• management’s concurrence with the recommendations made and commitment to continue to train

staff to improve compliance with existing requirements.

Members of the Committee thanked the Internal Audit Department for their presentation and audit, and

management for their response.

LIMITED CONTRACT COMPLIANCE AUDITS

9. Seattle Food Partners, LLC

Director Fernandes noted that there were no findings related to this audit.

INFORMATION TECHNOLOGY AUDITS

No information technology audits were presented.

11. Committee Comments

Commissioner Hasegawa thanked Commissioner Calkins for chairing the meeting.

13. Adjournment

There being no further business, the meeting adjourned at 11:40 a.m.

Prepared: Attest:

__________________________________ __________________________________

Michelle M. Hart, MMC, Commission Clerk Toshiko Hasegawa, Audit Committee Chair

Minutes approved: December 5, 2024.