TagAudit(12)

In March 2026, Washington State aviation and transportation officials exchanged emails revealing that the state faces approximately $210 million in aviation fuel tax liability after an FAA audit found it had been improperly diverting aviation fuel tax revenues to non-compliant uses. Even if all disputed expenditures—totaling about $32.6 million—were proven allowable, Washington would still be found in non-compliance, prompting the state's Aviation Director to recommend a proactive resolution strategy with the FAA. The correspondence also references federal law allowing state aviation fuel taxes to fund 'state aviation programs,' with ongoing debate about whether uses such as Sustainable Aviation Fuel development could qualify as compliant under that definition.

The FAA conducted a compliance review of Seattle-Tacoma International Airport (SEA), managed by the Port of Seattle, to assess whether airport revenues were being used in accordance with federal law and FAA policies. The review found several violations, including the use of airport funds for familiarization tours promoting tourism and existing airline routes, which are prohibited forms of general economic development. The FAA ordered reimbursement of over $354,000 in improper marketing expenses and required the Port to immediately stop using airport revenue for non-compliant marketing activities.

The Port of Seattle Commission Audit Committee met on July 15, 2025 to review a range of audit reports, including the 2024 financial statement audit conducted by Moss Adams, performance audits of community initiatives and the Maritime Innovation Center, an IT audit on third-party risk management, and several concession compliance audits for SSP America restaurant locations at Seattle-Tacoma International Airport. The agenda also included approval of minutes from previous meetings and an update to the 2025 Audit Plan. These materials are primarily focused on financial oversight and internal controls at the Port of Seattle, and do not address Sea-Tac Airport noise policy.

A 2023 federal audit found that the FAA has made progress confirming whether state and local governments comply with rules governing how aviation fuel tax revenue must be used, but has not yet verified that compliant jurisdictions are actually spending those funds on aviation-related purposes. Five jurisdictions remain out of compliance and have not faced enforcement action, largely due to congressional guidance encouraging the FAA to delay penalties. The audit resulted in three recommendations to strengthen FAA oversight and prevent airport revenue from being diverted to non-aviation purposes.

The Washington State Auditor's Office conducted an accountability audit of the Port of Seattle covering the period January 1 through December 31, 2021, with the report published on April 6, 2023. The audit examined the Port's compliance with applicable requirements and its safeguarding of public resources, with findings and responses documented in the report. This independent audit was intended to promote transparency and accountability in Port operations for the benefit of management, commissioners, and the public.

A 2008 investigation by the Seattle Port Commission found ten instances of fraud in Port of Seattle contracting practices, including bid manipulation, improper payments, and contract steering to preferred vendors, though no personal financial gain or embezzlement was identified. The inquiry, which reviewed over 250,000 pages of documents and conducted 75+ interviews, also found several instances where Port staff violated laws or policies without meeting the legal definition of fraud. Additionally, some findings from the State Auditor's 2007 Performance Audit were determined to be unsubstantiated by the underlying facts.

The Port of Seattle Commission adopted Resolution No. 3810(AM) in January 2023, updating the rules for how much authority and spending power the Commission delegates to the Executive Director. The revision increased purchasing thresholds that had remained largely unchanged since 2009, reflecting inflation and growing operational demands, while adding stronger reporting and transparency requirements. The new Delegation of Responsibility and Authority (DORA) policy took effect April 3, 2023, and requires periodic reviews at least every five years to ensure it continues to meet the Port's needs.

A 2019 Port of Seattle internal audit of the Noise Insulation Program — which has invested over $400 million since 1985 to reduce aircraft noise in homes and schools near Sea-Tac Airport — found two key problems: a contractor called Burton Construction overbilled the Port by an average markup of 51% above subcontractor costs, and the Highline School District failed to consistently meet federal grant requirements for disadvantaged business enterprises and Buy American standards. The audit covered January 2013 through March 2019 and assessed compliance with FAA federal grant rules.