Status Assessment of FAA's Cost Accounting System and Practices
As required by AIR-21, we reported to Congress on our first annual assessment of the status of FAA’s cost accounting system. FAA has made progress in developing its cost accounting system. FAA's methods of calculating its total costs are reasonable. Notwithstanding those accomplishments, the cost accounting system is 4 years behind the original schedule and the current estimated cost is nearly 3 times the original estimate. FAA cannot determine the actual labor cost for its activities, services, and projects and the cost accounting system does not properly collect overhead costs for facilities and equipment projects. The cost accounting system does not operate efficiently resulting in untimely delivery of cost accounting information, and FAA has made little progress in developing required cost and performance management practices. We recommended that FAA establish the implementation of its cost accounting and labor distribution systems as a top priority and review the cost accounting system to determine whether more efficient methods can be used.