December 11, 2017
FAA Needs To Enhance the Oversight and Management of Its Overflight Fee Program
What We Looked At
The Federal Aviation Reauthorization Act of 1996 gave the Federal Aviation Administration (FAA) authority to charge overflight fees to most aircraft operators that fly in U.S.-controlled airspace but do not depart or land in the United States. However, several airlines and air transport associations have sued FAA, stating that the Agency lacked a reliable methodology for determining overflight fees, and the courts frequently overturned FAA’s practices. While the 2001 Aviation and Transportation Security Act states that overflight fees must be reasonably related to FAA’s costs for providing overflight services, and the Agency’s determination of those costs is not subject to judicial review, we have previously found issues with FAA’s process for collecting the fees. Accordingly, we initiated this audit to assess FAA’s policies and procedures for ensuring that (1) overflight fees are accurately computed, (2) exceptions are appropriately applied, and (3) fees are collected or referred to the Department of the Treasury (Treasury) for collection in accordance with Federal laws and regulations.
What We Found
FAA invoices aircraft operators for millions of dollars in overflight fees, but it does not have sufficient policies and procedures to ensure those fees are computed accurately. Moreover, FAA provides little oversight to the contractor who determines which flights are charged overflight fees and only minimal support to the personnel who generate the invoices. FAA’s policies and procedures also do not explain when to apply exceptions to the Federal requirement to send invoices only when monthly overflight fees are equal to or exceed $250. As a result, some users have been billed incorrectly. Finally, FAA does not ensure that its overflight-fee debt-collection efforts comply with Federal laws and regulations. Based on our statistical sample, we project that invoices totaling $7.98 million (91.6 percent of the $8.71 million in the universe) have issues with timely referrals to the Treasury.
We made six recommendations to help FAA strengthen its internal controls and ensure the accuracy, appropriateness, and collection of overflight fees. FAA fully concurred with all six recommendations as written.