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INTERNAL AUDIT REPORT
Capital Project Audit
Planewear Tenant Reimbursement Agreement (CT-09)
June 2023 – January 2025
Issue Date: March 4, 2026
Report No. 2026-03
Planewear Tenant Reimbursement Agreement (CT-09)
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TABLE OF CONTENTS
Executive Summary ................................................................................................................................................. 3
Background ............................................................................................................................................................. 4
Audit Scope and Methodology ............................................................................................................................... 5
Schedule of Observations and Recommendations ................................................................................................ 6
Appendix A: Risk Ratings ......................................................................................................................................... 7
Planewear Tenant Reimbursement Agreement (CT-09)
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Executive Summary
We completed an audit of the Planewear Tenant Reimbursement Agreement (TRA) covering the period
June 2023, through January 2025. The objective of this audit was to determine whether Port staff
followed policies, procedures, and requirements outlined in the TRA.
Planewear has held a lease with the Port since June 2018, for space located in Concourse C. This
location was significantly impacted by the Concourse C Expansion Project, requiring the tenant to close.
In response, Airport Dining and Retail staff, in coordination with the Port Aviation Project Management
Group, identified a comparable location within the Central Terminal. The Port subsequently entered a
TRA for an amount not to exceed $1.5 million, which was executed on June 29, 2023.
The Standard Operating Procedures (SOP) are currently under review. Accordingly, we reviewed the
TRA and the 2022 version of the Port’s related SOPs.
Generally, controls were operating effectively. However, during our review, we identified a control gap
where internal controls could be strengthened or where TRA contract language could be clarified or
enhanced. This opportunity is summarized below and discussed in greater detail beginning on page six
of this report.
1. (Low) Port pay application reviewers did not obtain documentation required by the Tenant
Reimbursement Agreement prior to payment.
We also identified opportunities to improve processes related to updating Standard Operating
Procedures and documentation storage; these observations were communicated separately to Port
management.
Glenn Fernandes, CPA
Director, Internal Audit
Responsible Management Team
Karen Goon, Deputy Executive Director
Eileen Francisco, Director AV Project Management Group
Brian Sweet, Director Engineering Construction Management
Heather Munden, Director Eng Dept Ops
Jeff Wolf, Director AV Commercial Management
Stuart Matthews, Assistant Director AV Project Management Group
Planewear Tenant Reimbursement Agreement (CT-09)
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Background
Planewear is a a small, local, woman-owned Airport Concessions Disadvantage Business Enterprise
(ACDBE) that entered into a Lease and Concession Agreement (Agreement) with the Port on June 19,
2018. The Agreement, which includes a six-year Commission approved extension, is set to expire on
December 31, 2033. Planewear offers an aviation and travel themed store which sells apparel,
accessories, luggage, collectibles and other travel items.
Planewear’s original space experienced multiple impacts during the term of the Agreement. It was
further affected by the Concourse C Expansion project which would have required Planewear to close
for several years. After working closely with the tenant and conducting additional space evaluations,
the Airport Dining and Retail staff, along with the Aviation Project Management Group (AVPMG)
identified a comparable location, CT-09 within the Central Terminal, for Planewear to relocate. This
relocation included a new tenant reimbursement project.
As part of this relocation, the Port executed a Tenant Reimbursement Agreement (TRA) with
Planewear to cover the actual, reasonable costs associated with the design and remodel of space CT-
09. The remodel scope included, but was not limited to, permitting, demolition of existing fixtures,
installation of new electrical service, millwork, and new storefront signage. Planewear reopened in
their new space in April of 2025.
Planewear Tenant Reimbursement Agreement (CT-09)
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Audit Scope and Methodology
We conducted this performance audit in accordance with Generally Accepted Government Auditing
Standards and The Institute of Internal Auditors’ Global Internal Audit Standards. These standards
require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit objectives. We believe the
evidence obtained meets this requirement and supports our audit objectives.
The period audited was June 2023, through January 2025 and included the following procedures:
Vendor Payments
• Extracted all payments made under the project number
• Identified the payee(s) associated with the Project
• Reviewed invoices and supporting documentation to confirm that duplicate payments were not
made to multiple entities (e.g., sole proprietor and/or DBA name)
Pay Applications
• Examined all six invoices submitted to verify that requested reimbursement amounts were
supported by adequate documentation
• Reviewed payments to verify they did not exceed contract payment requirements
• Confirmed total payment did not exceed the contract’s Not to Exceed amount of $1.5 million
• Verified payments were issued in accordance with contract terms
• Reviewed documentation to determine whether the contingency use complied with contractual
requirements
Prevailing Wages
• Reviewed the contract to identify prevailing wage clauses and related compliance obligations
• Compared Statements of Intent to Pay Prevailing Wages and Affidavits of Wages Paid, listed
by the Department of Labor and Industries, against those provided to the Port
Planewear Tenant Reimbursement Agreement (CT-09)
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Schedule of Observations and Recommendations
Port pay application reviewers did not obtain documentation required by the Tenant
Reimbursement Agreement prior to payment.
Intents and Affidavits
The TRA required the Tenant to provide the Port with Washington State Department of Labor and
Industries, approved Statements of Intent to Pay Prevailing Wages and Affidavits of Wages Paid from
all contractors with labor costs associated with construction, before the Port issued reimbursement.
1
Our review found that the Port received the general contractor’s Intent but did not receive the required
Intents from the three subcontractors who performed work on the Project. In addition, the Port did not
obtain the general contractor’s Affidavit before issuing final payment.
To further evaluate compliance, we reviewed the Labor and Industries website. This review confirmed
that the general contractor did not file an Affidavit, and two subcontractors filed an Intent but no Affidavit.
Recommendations:
1. Pay application reviewers should ensure that all required documentation is collected and verified
prior to approving any reimbursement.
2. The Tenant Reimbursement Agreement language should be reviewed to determine whether the
Intent and Affidavit requirements are still necessary and amended accordingly.
Management Response/Action Plan:
AVPMG Management agrees with the recommendations and will be updating the Tenant
Reimbursement Agreement Responsibilities SOP to better clarify roles and responsibilities regarding
verification of documentation necessary prior to reimbursement.
AVPMG will work with Construction Management, CPO, POS legal department, Commercial
Management, and Business and Properties to determine if the Intent and Affidavit requirements are
still necessary.
AVPMG will review the updated procedure with all Tenant Project Management staff managing TRA
projects to ensure they are familiar with the updated process.
1
See: Tenant Reimbursement Agreement §2.4 Prevailing Wages; §5.1 Prevailing Wages; Exhibit D: Required
Reimbursement Records.
#1) Rating: Low
DUE DATE: 8/31/2026
Planewear Tenant Reimbursement Agreement (CT-09)
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Appendix A: Risk Ratings
Observations identified during the audit are assigned a risk rating, as outlined in the table below. Only
one of the criteria needs to be met for an observation to be rated High, Medium, or Low. Low rated
observations will be evaluated and may or may not be reflected in the final report.
Rating
Financial/
Operational
Impact
Internal
Controls
Compliance Public
Commission/
Management
High Significant
Missing or
partial
controls
Non-compliance
with Laws, Port
Policies,
Contracts
High probability
for external audit
issues and / or
negative public
perception
Requires
immediate
attention
Medium Moderate
controls
Not
functioning
Partial
compliance with
Laws, Port
Policies
Contracts
Moderate
probability for
external audit
issues and / or
negative public
perception
Requires
attention
Low Minimal
Functioning
as intended
but could be
enhanced
Mostly complies
with laws, Port
Policies,
Contracts
Low probability
for external audit
issues and/or
negative public
perception
Does not
require
immediate
attention