Loan Default Could Result in Misuse of Airport Funds at Tulsa International Airport
May 06, 2004
Project ID: AV-2004-058
We issued an audit report regarding potential misuse of airport funds by Tulsa International Airport. We found the airport entered into an agreement that may require it to purchase property used as collateral in a loan to Great Plains Airlines. The agreement appears to have been made without regard to the fair market value of the property or whether the airport needed to purchase the property to make airport improvements. As a party to this real-estate transaction—under which it was obligated to pay off the loan in case of default—the airport appeared to be subsidizing the airline. In addition, airport use of airport funds to pay off the loan would constitute a diversion of airport revenue or could result in inappropriate use of monies collected from passenger facility charges.