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Summary

On April 18, 2013, we issued a report on the Federal Aviation Administration’s (FAA) oversight of airport grants funded by the American Recovery and Reinvestment Act of 2009 (ARRA). ARRA injected an unprecedented $1.1 billion into FAA’s Airport Improvement Program (AIP) grants program and established tight timeframes for distributing funds, emphasizing preference for projects that could be completed in 2 years. ARRA also called for an unprecedented level of oversight to prevent improper payments and misuse of Federal funds. However, we found that FAA’s oversight process was not sufficient to prevent or detect more than $1.4 million in improper payments (i.e., payments that were ineligible or insufficiently documented) for ARRA-funded work. These improper payments occurred in part because FAA over-relies on grantees to ensure their payment requests are accurate and supported. In addition, we found that FAA’s oversight also did not ensure that some airport expenditures fully met ARRA and AIP requirements. Shortfalls included allowing some grantees to (1) use ARRA funds to cover prior year work, (2) inappropriately mix ARRA and AIP funds, (3) accept single bids for projects without conducting cost comparisons, (4) inaccurately describe scope in project documents, and (5) not maintain sufficient records of ARRA-funded work. Our findings and recommendations highlighted opportunities to learn lessons from ARRA and further improve FAA’s grant oversight, and the Agency is revising its policies and procedures to achieve these improvements. FAA concurred with two of our recommendations and partially concurred with five. We are requesting that FAA provide additional information or reconsider its response for four recommendations.