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Summary

On September 13, we issued our report on FAA's oversight of inactive Airport Improvement Program (AIP) grant obligations. The objectives of our audit were to: (1) assess the effectiveness of FAA's policies and procedures for identifying, reviewing, and de-obligating unneeded AIP grant obligations and (2) determine the extent to which unneeded AIP grant obligations should be liquidated and put to better use on other projects or returned to the Airport and Airway Trust Fund.

In FY 2006, FAA resolved a significant number of inactive and old AIP grants. Despite this progress, we identified two areas for improvement: (1) FAA's process for overseeing inactive grants allowed some to remain idle for periods of time that exceeded the Agency's standard measure of 18 months, and (2) approximately $9.7 million in obligations had remained on 76 closed grants, on average, for 21 months. For most of these grants, FAA either failed to de-obligate unneeded funds or allowed airport sponsors to continue expending funds after the grants were closed-both of which are actions contrary to FAA policy. If FAA had addressed these grants sooner, the funds could have been put to better use on other projects. While Agency officials have taken some corrective steps to address these weaknesses, FAA still needs to strengthen its review process to ensure that grants do not remain idle longer than 18 months and establish a process for ensuring that grants are not closed prematurely and do not retain any unneeded funds.