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July 18, 2022

FAA Quickly Awarded CARES Act Funds but Can Enhance Its Oversight Approach To Promote Effective Stewardship

Self-initiated
Project ID: 
AV2022032
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What We Looked At
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided the Federal Aviation Administration (FAA) with $10 billion to help airports deal with the public health emergency caused by Coronavirus 2019 (COVID-19). FAA awarded $9.1 billion in grants to airports nationwide, using its existing Airport Improvement Program (AIP) to distribute the funds. Our objective for this self-initiated audit was to assess whether FAA’s policies and procedures for awarding and overseeing CARES Act grants are sufficient to protect taxpayer interests.
 
What We Found
Leveraging the AIP allowed FAA to announce CARES Act awards for more than 3,000 airports in just 2 weeks. However, changes in the Agency’s oversight process regarding supporting documentation requirements affected its ability to monitor program performance, and we determined at the time of our review that it contributed to more than $271 million in unsupported costs, $85 million in questioned costs, and $3 million of improper payments. FAA also did not establish procedures for deobligating CARES Act grants that become inactive, exceed the period of performance, or provide airport sponsors with adequate guidance on documenting workforce retention data. These internal control weaknesses hindered FAA’s ability to ensure that it is operating the program as Congress intended, administering projects in a fiscally responsible manner, and achieving reporting and compliance objectives.
 
Our Recommendations
We are making seven recommendations to improve FAA’s oversight of COVID relief funds. FAA concurred with recommendations 5–7 and provided completion dates. The Agency partially concurred with recommendations 1–4. Based on documentation FAA provided after our review was completed, we consider recommendation 1 resolved but open pending completion of planned actions, recommendations 2 and 3 resolved and closed, and recommendation 4 unresolved. We are asking FAA to reconsider its position and provide us with a revised response within 30 days of the date of this report.

Recommendations

Open

Closed

Closed on 04.05.2023
Pandemic Oversight
No. 1 to FAA

Assess the risk of improper payment for debt service, payroll, operating and maintenance expenses, and CARES Act reimbursement requests, and revise FAA's policy on supporting documentation requirements to account for risk level.

Closed on 08.02.2022
Pandemic Oversight
$271,234,899
No. 2 to FAA

Request supporting documentation for the transactions related to the $271 million in unsupported costs we identifed, and collect all unsupported costs or Identify FAA's rationale for accepting them.

Closed on 08.02.2022
Pandemic Oversight
$85,817,209
No. 3 to FAA

Assess transactions related to the $85 million we identified in grant recipients' improper use of funds due to noncompliance with law or ineligible use of funds, and recover unallowable reimbursements.

Closed on 09.30.2022
Pandemic Oversight
$3,300,656
No. 4 to FAA

Recover the $3.3 million for services rendered or payment that was due prior to the allowable period.

Closed on 01.04.2023
Pandemic Oversight
No. 5 to FAA

Develop and implement a plan to encourage recipients to expend CARES Act funds.

Closed on 01.18.2023
Pandemic Oversight
No. 6 to FAA

Review workforce retention data provided by sponsors, and update records as needed to ensure compliance with law.

Closed on 01.17.2023
Pandemic Oversight
No. 7 to FAA

Develop a plan for implementing future workforce retention requirements as a condition of grants-in-aid based practices and lessons learned from prior efforts.