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February 10, 2021

Gaps in FAA's Oversight of the AIP State Block Grant Program Contribute to Adherence Issues and Increase Risks

Self-initiated
Project ID: 
AV2021017
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What We Looked At
The Federal Aviation Administration’s (FAA) Airport Improvement Program (AIP) provides grants to public and private entities to enhance safety and security, maintain infrastructure, increase capacity, and mitigate airport noise. According to FAA, between 2019 and 2023, U.S. airports will need approximately $35.1 billion for these types of projects. Under the State Block Grant Program (SBGP), FAA provides AIP funds directly to Block Grant States (BGS), which then take on certain responsibilities for administering the AIP. Given the need to ensure that Federal funds are spent appropriately, as well as Congress’ recent expansion of the SBGP, we initiated this audit with the following objectives: to assess FAA’s oversight of (1) State project selection and (2) grantee and subgrantee compliance with Federal laws and regulations on the use of funds.
 
What We Found
FAA performs few oversight activities during the project selection process. For example, while entitlement funds represent the majority of SBGP awards, FAA policy directs Agency officials to focus on projects seeking discretionary funds. We estimate that, as a result, FAA did not evaluate projects awarded $87.9 million in Federal funds. FAA did not provide BGS with consolidated guidance for almost 3 decades; consequently, BGS still do not fully understand their responsibilities. FAA also has never performed an assessment to ensure compliance with Federal requirements or required BGS to document their decisions. Thus, FAA may be funding airport projects that do not meet national priorities. Furthermore, FAA’s oversight does not prevent compliance gaps or resolve persistent programmatic issues. Finally, the Agency’s own reviews of the program have been inconsistent and do not assign responsibility for corrective actions or track grantee compliance. As a result, staff are unsure where to direct their oversight.
 
Our Recommendations
We made 13 recommendations to improve FAA’s oversight of SBGP project selection and grantee compliance with Federal financial laws and regulations. The Agency concurred with 11 of our recommendations and partially concurred with 2, proposing alternative actions. We consider all 13 recommendations to be resolved but open pending completion of planned actions.

Recommendations

Open

Closed

No. 1 to FAA

Revise FAA policy to include equitable review of projects funded by discretionary and entitlement funds, and perform regular formal assessments of Block Grant States' (BGS) adherence to Federal requirements for project selection.

No. 2 to FAA

Revise FAA's policy on documenting project-approval decisions to ensure that BGS adhere to project prioritization.

No. 3 to FAA

Revise and implement FAA's process for resolving instances of insufficient documentation as support for reimbursement to BGS.

$5,733,468
No. 4 to FAA

Request supporting documentation for the transactions related to the $5.7 million in unsupported project costs we identified in Wisconsin, and collect all unsupported costs or identify FAA's rationale for accepting them.

$12,835
No. 5 to FAA

Assess the claims related to the $12,835 in unsupported Cash Management Improvement Act reimbursements we identified in Michigan, and review similar transactions within the SBGP for unsupported costs. Develop an action plan to collect all unsupported costs or identify FAA's rationale for accepting them.

No. 6 to FAA

Develop and implement a procedure for monitoring BGS adherence to requirements for Airport Improvement Program (AIP) expenditures at regular and frequent intervals.

No. 7 to FAA

Revise guidance for all AIP stakeholders to reinforce the required sequence in which different types of AIP funds are to be expended.

$115,666,168
No. 8 to FAA

Require Airport District Offices (ADO) and Regional Offices to comply with grant closeout requirements for BGS. Implementation of this recommendation could put $115.7 million in funds to better use.

$5,749,537
No. 9 to FAA

Develop and implement a procedure to verify the accuracy of BGS data submissions. Implementation of this recommendation could put $5.7 million in funds to better use by improving FAA's grant management oversight.

No. 10 to FAA

Formalize and implement minimum training requirements for BGS officials, and give BGS access to all FAA-conducted, AIP-related online and in-person training.

No. 11 to FAA

Finalize the draft Memorandum of Agreement outlined in the SBGP Advisory Circular and implement it for all 10 current BGS and any future program entrants.

No. 12 to FAA

Finalize and implement an SBGP-wide audit plan in accordance with FAA's SBGP Advisory Circular, and include a requirement to document resolution of findings.

No. 13 to FAA

Ensure compliance or implementation of FAA's procedure to share resolutions of Single Audit Report recommendations with the ADOs and Regional Offices that oversee the BGS.