Audit Reports

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Improvements Are Needed To Strengthen FAA’s Oversight of eInvoicing and AIP Grant Payments

Self-Initiated
Project ID: 
FI2018101
What We Looked At
In 2012, the Department of Transportation (DOT) implemented electronic invoicing (eInvoicing) for grant invoice processing across the Department. While DOT developed standardized eInvoicing training at the department level, individual Operating Administrations developed their own eInvoicing guidance and processes for grantees submitting payment requests. We assessed the Federal Aviation Administration’s (FAA) policies, procedures, and oversight for eInvoicing in the Airport Improvement Program (AIP). The AIP is one of DOT’s largest grant programs, providing approximately $3 billion a year to sponsors (grantees) including commercial and general aviation airports to support projects that improve safety and efficiency. We tested AIP payments to grantees to determine if they met FAA’s eInvoicing requirements. Our objectives were to (1) evaluate FAA’s implementation of eInvoicing in AIP and (2) assess whether AIP grant payments were supported and valid.
 
What We Found
The guidance and internal control procedures FAA developed for eInvoicing were not always followed. FAA developed a risk-based approach to oversight of AIP grantees and their payments, yet FAA staff responsible for oversight did not always adhere to the control procedures. Additionally, AIP grantees requested and were paid millions of dollars without complying with FAA’s eInvoicing documentation requirements to support payment requests. Using statistical sampling, we estimate that about $751 million (12.5 percent) of the $6 billion in AIP payments during fiscal years 2015 and 2016 were non-compliant with FAA eInvoicing supporting documentation requirements. Finally, we found that AIP grant payments were not always fully supported and valid. We identified questioned costs totaling about $1 million because grantees did not always maintain complete and valid support, funds were paid in excess of the allowable Federal share, and a grant agreement was not amended when applicable.
 
Our Recommendations
Of our eight recommendations to improve implementation of eInvoicing and communicate policies to grantees and FAA Regional and Airport District Office staff, FAA concurred with seven and partially concurred with one.

Recommendations

Open

Closed

No. 1 to FAA

Develop and implement controls for periodically verifying that RO/ADO program managers are implementing FAA's policy for (a) assigning and monitoring grantee risk ratings, as required; (b) performing manual approvals, when required; and (c) performing quarterly reviews and, when applicable, modifying grantee risk ratings according to FAA guidance.

No. 2 to FAA

Formally request that OST Delphi system managers modify the wording of the warning message to AIP grantees to specifically state when documentation has not been attached to payment requests and that such documentation is required by FAA policy and the Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERA).

No. 3 to FAA

Formally request that OST Delphi system managers implement a function that denies AIP payments to grantees that do not provide the required supporting documentation at the time of the payment request.

No. 4 to FAA

Update FAA policy to include the availability of existing Delphi eInvoicing training and communicate the policy revision to all AIP grantees.

$102,323
No. 5 to FAA

Develop and implement a plan to recover the $102,323 in questioned and unsupported costs identified in this report.

No. 6 to FAA

Communicate to AIP grantees FAA's policy requirement for maintaining all original documentation that supports grant payments and confirm that all grantees have acknowledged this requirement.

No. 7 to FAA

Update AIP payment policy to include a specific requirement that grantees submit payment requests on invoiced costs incurred up to the allowable Federal share, and communicate the revision to all AIP grantees.

No. 8 to FAA

Improve existing training for RO/ADO program managers to follow the AIP Handbook requirements for amending grant agreements when expanding project descriptions.