Audit Reports

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December 11, 2017

FAA Needs To Enhance the Oversight and Management of Its Overflight Fee Program

Self-initiated
Project ID: 
FI2018011
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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.
 
Our Recommendations
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.

Recommendations

Open

Closed

Closed on 02.28.2018
No. 1 to FAA

Develop and implement policies and procedures to retain the original data files for purposes of validating the accuracy of the data being used to compute overflight fees.

Closed on 07.02.2018
No. 2 to FAA

Develop a timeline that indicates when FAA overflight-fee officials will start using updated software (that meet its system reliability requirements) for computing fees.

Closed on 02.28.2018
No. 3 to FAA

Develop and implement internal controls to oversee overflight-fee contractors, specifically, to review and approve flight data before the contractor submits them for billing.

Closed on 03.02.2018
No. 4 to FAA

Develop and implement internal controls to oversee Enterprise Services Center employees and require debt-collection training to ensure overflight fees are properly billed.

Closed on 03.02.2018
No. 5 to FAA

Establish policies and procedures that require staff to appropriately apply Federal laws and regulations and exclude aircraft users that are exempt or meet exception rules from receiving invoices for overflight fees.

Closed on 01.13.2021
$18,760,000
No. 6 to FAA

Develop and implement policies and procedures to ensure that overflight-fee collection activities comply with Department of the Treasury requirements, such as:a. Ensuring debtors are given due process; implementation of this recommendation could put $1.48 million in funds to better use.b. Assessing late charges on all delinquent debts; implementation of this recommendation could put $9.3 million in funds to better use.c. Making timely referrals of delinquent overflight fees to Treasury; implementation of this recommendation could put $7.98 million in funds to better use.